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Midwest trading halted as hostile takeover looms

Trading in the shares of iron ore miner Midwest Corp was halted yesterday pending an announcement connected to the first hostile takeover bid by a Chinese company in Australia.

The Australian Securities Exchange said in a statement that Midwest had sought the trading halt.

The trading stop was to remain in place until the announcement was made or until the start of normal trading tomorrow.

In a statement, Midwest said the announcement “may impact on the takeover of the company.”

State-backed Sinosteel Corp, China’s No. 2 iron ore importer, has offered A$5.60 per share for Midwest in a bid that values the Australian company at about A$1.2 billion (US$1.1 billion).

Midwest has rejected the bid as too low.

In recent weeks, Sinosteel and Midwest have exchanged terse statements about whether a dispute between Midwest and another company, Yilgarn Infrastructure Ltd, could harm Midwest’s plans to develop a port in Western Australia State.

Sinosteel already holds a 19.9 percent interest in Midwest, which is planning a 15 million-tonnes-a-year iron ore project in Western Australia State to shore up its iron ore supply.

Later yesterday, the board of Midwest recommended shareholders accept a raised takeover bid worth almost A$1.4 billion.
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