Sinosteel on cusp of controlling Midwest

Sinosteel is within reach of taking out a controlling stake in takeover target Midwest Corporation Ltd, increasing its interest today to 47.14 per cent after some Midwest directors decided to sell their stake to the steelmaker.

Today the Chinese company advised that it had received further acceptances, boosting its interest in Midwest from 45.58 per cent.

Yesterday four Midwest directors, representing a combined 4.1 per cent interest, decided to accept Sinosteel's $6.38 cash offer.

Together with that interest, Sinosteel is expected to hold 51.24 per cent, taking it over the 50.1 per cent minimum acceptance threshold.

Directors Dato David Law and Datuk Roger Tan, who together hold 13.1 per cent in Midwest, have yet to decide.

While Sinosteel is likely to have majority control of Midwest, it will not have full control with Murchison Metals Ltd, which holds a 10 per cent stake, announcing it will not accept Sinosteel's offer.

Earlier this week, Murchison dropped its proposed merger with Midwest after failing to gain approval from the Chinese steelmaker.

Meanwhile Sinosteel, in its 10th supplementary bidder's statement, has named three of its directors, Tony Cheng, Michael Wu and Deacon's partner Ian McCubbin, that it intends to nominote for appointment to the Midwest Board.

"Sinosteel has requested the existing Midwest board to appoint these nominees as additional directors and anticipates such appointments will be made in the coming days," the company said.

The offer is scheduled to close onl July 18.

Shares in Midwest last traded at $6.40.