Brockman Resources has failed in its bid to resist a takeover offer by Hong Kong investment house Wah Nam International, which has received acceptances taking its stake up to 52 per cent in the Pilbara iron ore miner.
Wah Nam announced to the market after close of trading Friday it had gained a controlling stake in Brockman and also extended the deadline for the offer until June 15.
Brockman, however, said it remained concerned Wah Nam had stockpiled a bigger than permissible interest via alleged related party transactions.
Under the Corporations Act, a company can't hold a stake of more than 20 per cent in another firm without formally declaring a takeover.
In a letter to shareholders last week, Brockman said 96.5 per cent of the Wah Nam's total acceptances had come from only nine shareholders, and 0.59 per cent of acceptances were from Australian or New Zealand-based shareholders.
"Brockman continues to have serious concerns about the pattern of acceptances into the Wah Nam offer and the links between off-shore investors in Brockman," the company said in its statement.
"Brockman remains concerned that such links may result in Wah Nam acquiring our company without paying a fair or reasonable price."
But Wah Nam said analysis had shown Brockman's Australian registered shareholders, excluding Wah Nam and Brockman directors, held only 21 per cent of the target's shares.
"Therefore, it is not surprising that the majority of acceptances to date have been ... received from shareholders with addresses registered outside Australia," Wah Nam said in a statement.
"Wah Nam is pleased that more than half of the number of shareholders that have accepted the takeover offer to date have come from Australian registered shareholders who are not in Brockman's top 50."
Wah Nam encouraged Brockman shareholders who had not yet accepted the bid to do so, while Brockman urged them to reject the offer.
The bid of 30 Wah Nam shares for each Brockman share held valued the target at $932.2 million when it was launched on November 11.
Wah Nam has extended the offer by one month until June 15.
Brockman's shares were down eight cents at $4.40 at 1503 AEST, while Wah Nam's Australian-listed shares were steady at 19.5 cents.
