Australia's Murchison Metals sweetens takeover offer for Midwest - UPDATE |
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Mon, 15 Oct 2007 03:25
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SYDNEY (Thomson Financial) - Australia's Murchison Metals Ltd said Monday it will increase its unconditional all-scrip takeover offer for Midwest Corporation Ltd to one Murchison share for every 1.08 Midwest shares held, valuing its fellow emerging iron ore producer at 1.05 billion Australian dollars.Murchison, which is backed by Japan's Mitsubishi Corp and South Korea's POSCO, said the higher offer values Midwest shares at 4.93 dollars each, based on Murchison's closing price on Friday.The original offer of one share for each 1.16 Midwest shares valued the company at 4.38 dollars a share. Midwest is backed by China's Sinosteel Corp.Murchison last Tuesday launched a two-tiered offer for Midwest after merger talks between the two companies broke down.At the time, Murchison said it would increase its offer if it was reasonably satisfied Midwest would not incur a material tax liability from the sale of a 50 percent interest in its Weld Range and Koolanooka projects in the midwest region of Western Australia to Sinosteel.Midwest said Thursday the sale is highly conditional and uncertain to proceed. It has not responded to the takeover offer.''Whilst we have asked Midwest for more details about its arrangements with Sinosteel, the good news is that there appears to be considerably more flexibility in the Sinosteel arrangements thanwe had previously thought,'' Murchison executive chairman Paul Kopejtka said in a statement to the Australian Stock Exchange.''That flexibility should ensure that potentially significant value loss does not occur. We aretherefore pleased to be able to offer all Midwest shareholders the higher price.''Murchison said it plans to lodge a bidder's statement with Midwest and the Australian Stock Exchange later this week.Murchison, which has a market capitalisation nearly three times that of Midwest, wants to buy Midwest to gain access to its iron ore deposits and the right to develop rail and port infrastructure in the midwest region of Western Australia.If the takeover succeeds, Murchison will have the potential to produce 45 million tonnes of iron ore a year, making it Australia's second-largest independent iron miner after Fortescue Metals Group.At 12.25 pm (0225 GMT), Murchison was down 4 cents or 0.8 percent at 5.28 dollars while Midwest was up 24 cents or 4.9 percent at 5.15 dollars.(1 US dollar = 1.11 Australian dollars)allison.jackson@thomson.comaj/msbhx/msCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Australian shares close lower, ends 4-day winning streak - UPDATE 