24/10/2007 - 11:39

Midwest wants more info from Murchison

24/10/2007 - 11:39

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Takeover target Midwest Corporation Ltd has claimed that its suitor, fellow iron ore miner Murchison Metals Ltd, has failed to provide sufficient infomation in the bidders statement, as it urged shareholdfers to take no action on Murchison's offer.

Midwest wants more info from Murchison

Takeover target Midwest Corporation Ltd has claimed that its suitor, fellow iron ore miner Murchison Metals Ltd, has failed to provide sufficient infomation in the bidders statement, as it urged shareholdfers to take no action on Murchison's offer.

 

A Midwest statement is pasted below:

 

MIDWEST REITERATES TAKE NO ACTION ADVICE

The Board of Midwest Corporation Limited ("Midwest") reiterates its advice to shareholders to take no action in relation to the unsolicited offer from Murchison Metals Limited ("Murchison").

Murchison lodged its Bidder's Statement with Midwest and the Australian Stock Exchange on 19 October 2007.

Midwest Chief Executive Officer Mr Bryan Oliver said "When comparing Midwest's and Murchison's portfolio of assets, Midwest offers a much larger resource, a greater number of projects, a larger area of exploration tenements, same timing for targeted production start-up and identical infrastructure risks. Despite these facts, Murchison's offer values Midwest's assets at approximately half the value of its own assets."

"The Midwest management team and Board are very confident in our ability to deliver a future stand-alone iron ore producer of scale that will deliver significant long term value to our shareholders. We have a number of projects at various stages of development, creating a pipeline with significant growth potential, which we believe over time, will command a premium valuation. In no circumstance is Midwest's future success dependent on a deal with Murchison," Mr Oliver said.

The Midwest Directors express concerns about the lack of information in Murchison's Bidder's Statement in relation to a number of key issues, including:

The value and achievability of potential synergies. The Bidder's Statement fails to quantify the potential value of any synergies. It also does not provide sufficient information about the risks involved in achieving the synergies under different ownership structures

The limited disclosure provided in the Bidder's Statement about the Mitsubishi Agreement and how Murchison plans to integrate Midwest into Crosslands Resources Ltd ("Crosslands") or otherwise. The current information provided in the Bidder's Statement raises more questions than it answers and fails to disclose how Murchison is planning to integrate Midwest into Crosslands and the numerous risks involved.

Following this initial review of the Bidder's Statement, the Midwest Directors reiterates their unanimous advice to shareholders that they TAKE NO ACTION in relation to Murchison's offer. The Midwest Board will make its formal recommendation to shareholders in due course, once the offer has been fully reviewed and considered.

 

- Ends -

 

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