The takeover saga surrounding Midwest Corporation Ltd has taken another turn today as Chinese bidder Sinosteel seeks orders from the Takeovers Panel to prevent Murchison Metals Ltd and US company Harbinger capital from acquiring any more shares.
The takeover saga surrounding Midwest Corporation Ltd has taken another turn today as Chinese bidder Sinosteel seeks orders from the Takeovers Panel to prevent Murchison Metals Ltd and US company Harbinger Capital from acquiring any more shares.
The application comes in the wake of Harbinger purchasing an 8.1 per cent stake in Midwest late last month, increasing its interest in the takeover target to 9.11 per cent.
The recent purchase is in addition to its increased stake in Murchison which stands at 19.98 per cent.
Sinosteel claims Harbinger's purchase of Midwest shares is in breach of the Foreign Acquisitions and Takeovers Act and wants those shares to be vested in the Australian Securities and Investments Commission for sale.
The Chinese company has also complained that inadequate substantial shareholder notices had been issued in relation to Harbinger's investment in Midwest.
In addition Sinosteel claims that Harbinger and Murchison are related parties and that inadequate shareholding notices had been provided to Midwest and the Australian Securities Exchange.
"Sinosteel seeks interim orders that the Harbinger entities and Murchison not be permitted to acquire any further Midwest shares until permitted to do so in compliance with the Foreign Acquisitions and Takeovers Act," Sinosteel said in its application.
Meanwhile, the Chinese company has bumped up its stake in Midwest for the second time in as many days.
In a change in substantial shareholder notice, Sinosteel said it now had a voting stake of 33.82 per cent in Midwest.
Yesterday, Sinosteel said it had raised its stake in Midwest to 28.37 per cent, from about 20 per cent previously.
Sinosteel is vying with Murchison for control of the iron ore miner.
Murchison said earlier today that it was still confident of gaining the necessary approvals for the implementation of its potential merger with Midwest.
"While we're are obviously disappointed that a major Midwest shareholder has chosen to accept Sinosteel's offer at substantially below the prevailing market price, as far as we are concerned, we are full steam ahead on the implementation of the merger," Murchison chairman Paul Kopejka said.
Sinosteel declared its $6.38-a-share offer final and unconditional last week after Midwest agreed to merge with Murchison to form a $3 billion-plus entity.
Unusually, the target has maintained its recommendation of the Sinosteel offer, while also agreeing to the Murchison proposal based on an "initial assessment".
Midwest's board has recommended shareholders accept Sinosteel's $1.36 billion takeover offer, which closes on June 13.
Murchison said today that detailed legal and financial work on its proposal was underway.
"As there are no longer conditions to the Sinosteel takeover offer for Midwest, there is now no impediment to the execution of a binding Merger Implementation Agreement (MIA) for the merger between Murchison and Midwest," Murchison said.
The formal MIA is expected to be finalised and signed shortly, it added.
Work was also advancing on the formal disclosure documents required for the Murchison Scheme of Arrangement.