22/05/2008 - 11:22

Midwest responds to speculation

22/05/2008 - 11:22

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Takeover target Midwest Corporation Ltd said today it was seeking to establish an acceptance facility for shareholders who want to accept Sinosteel's takeover offer but want protection from a cut in the price they receive.

Midwest responds to speculation

Takeover target Midwest Corporation Ltd said today it was seeking to establish an acceptance facility for shareholders who want to accept Sinosteel's takeover offer but want protection from a cut in the price they receive.

 

A Midwest statement is pasted below:

In today's Street Talk column in The Australian Financial Review it is observed that:
- a facility is being created to allow Midwest Corporation Limited's (Midwest) retail shareholders to aggregate their holdings and accept as a block;
- 30.1% of shareholders are ready and waiting to accept into such a facility; and
- Deputy Chairman David Law is unlikely to accept Sinosteel's offer until after 30 June 2008.

Midwest shareholders should regard these observations as premature and speculative.

Midwest confirms that it is working pro-actively on behalf of its shareholders to ensure that accepting shareholders receive the proposed increased offer price of $6.38 for their Midwest shares, and not $5.60 per share.

The Midwest board has already taken steps to reduce the risk of shareholders receiving the lower offer price for their Midwest shares by qualifying its recommendation of Sinosteel's proposed increased offer of $6.38 in Midwest's
Supplementary Target's Statement of 30 April 2008 with several caveats including:

'Shareholders who accept the Offer before the 50.1% Condition is satisfied run the risk that the 50.1% Condition is not satisfied, so that the Offer Price does not increase to $6.38, and Sinosteel waives its minimum acceptance
condition. If this were to occur, accepting Shareholders would have sold their Shares for $5.60 per Share.'

Both before and since Sinosteel's announcement of its proposed increased offer price, Midwest has discussed with Sinosteel the possibility of Sinosteel establishing an acceptance facility or taking some other measures which would provide Midwest's shareholders greater certainty of receiving the increased price of $6.38 per share, if they accept Sinosteel's offer.

The discussions have also dealt with how any such facility or measures could enable shareholders who wish to vote their shares at any upcoming shareholder meetings of Midwest to retain the right to vote their shares.

The discussions are ongoing, but have not yet produced an outcome. If the discussions result in an acceptance facility or other measures being established, an announcement will be made to ASX.

Shareholder feedback received by Midwest indicates that some shareholders may accept Sinosteel's offer if a facility is implemented or other measures are taken which address these issues.

Midwest confirms that so far as it is aware, no Midwest director has made a decision to accept Sinosteel's offer in respect of Midwest shares he owns or controls.

 

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