China’s Sinosteel Corp (中國中鋼) said yesterday it was examining a rival bid for Australian iron ore miner Midwest, arguing its own proposal offered “the certainty of cash in a challenging environment.”
Sinosteel’s offer of A$1.36 billion (US$1.31 billion) for Midwest — or A$6.38 dollars cash per share — was trumped on Monday when Murchison Metals made an all-share bid valuing its target at A$1.5 billion.
Midwest’s board has unanimously recommended the Murchison bid, while maintaining a recommendation for the Sinosteel offer as it assesses the latest proposal.
Sinosteel moved to distance itself from remarks that were made last week by William Ren, the deputy director of the company’s Australian arm, saying that the Chinese state-owned entity would not increase its bid.
Sinosteel said in a statement that Ren was “not an official spokesman for the bid,” adding that it would review the Murchison proposal carefully before releasing its response.
“Sinosteel reserves its rights and will consider all options in its response,” it said.
Sinosteel already owns almost 20 percent of Midwest shares and has a small stake in Murchison.
Both Midwest and Murchison own iron ore projects in Western Australia that require rail and port infrastructure for their potential to be realized.
Murchison shares were down A$0.22 or 5 percent, at A$4.49 in mid-afternoon trade, while Midwest was up A$0.02 or 0.3 percent, at A$7.07.