15/09/2008 - 09:11

Harbinger hurdle in Midwest takeover

15/09/2008 - 09:11

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Two major shareholders in Western Australian iron ore miner Midwest Corporation Ltd have accepted the takeover offer from Chinese steelmaker Sinosteel, giving the bidder more than 82 per cent acceptances of its bid.

Harbinger hurdle in Midwest takeover

Two major shareholders in Western Australian iron ore miner Midwest Corporation Ltd have accepted the takeover offer from Chinese steelmaker Sinosteel, giving the bidder more than 82 per cent acceptances of its bid.

Sinosteel said today that both Murchison Metals Ltd and Armadale Offshore Inc have accepted its offer, taking acceptances to "in excess of 82 per cent" of Midwest's issued shares.

Murchison holds nine per cent of Midwest's shares while Armadale, an entity associated with former director David Law, holds 12 per cent.

The bidder said the major outstanding player now was US hedge fund Harbinger Capital, which holds 15.2 per cent but has indicated it will reject the Sinosteel offer.

Harbinger paid more than Sinosteel's $6.38 cash per share offer for its stake in Midwest.

Sinosteel's offer is scheduled to close at 1900 AEST today.

Sinosteel said today that if Harbinger accepted the offer, it "may proceeed to compulsory acquisition" of the remaining Midwest shares.

If Harbinger does not accept, then "Sinosteel will ask the directors of Midwest to review whether Midwest should remain listed on the (Australian securities exchange) or be removed from the official list of the ASX .

"If Midwest remains listed on ASX, liquidity in Midwest shares is likely to be very low with is two largest shareholders holding in excess of 97 per cent of Midwest shares," Sinosteel said.

Sinosteel said its offer would close at 1900 AEST today, September 15.

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