Sinosteel Corp is on the cusp of gaining control of Midwest Corporation after four of the company's directors decided to tend their own shareholding into the $1.36 billion takeover offer.
Midwest chairman Jesse Taylor and directors Francis Ng, Steven Chong and Stephen de Belle, have decided to accept the $6.38 cash per share bid offer for their collective 4.1 per cent holding in the company.
This will give Sinosteel, China's second largest iron ore trader, a 49.68 per cent holding in iron ore miner, Midwest.
The decision by Midwest directors to accept the Sinosteel takeover bid comes after the Chinese group upped its stake in the company to 45.58 per cent and Murchison Metals shelved a merger proposal with the iron ore miner.
Murchison terminated the merger proposal after failing to gain support from Sinosteel, Midwest's largest shareholder.
However, Murchison has vowed to stifle Sinosteel's takeover by not accepting the bid for its 10 per cent holding in Midwest, which effectively blocks a compulsory takeover of the company.
Sinosteel's takeover attempt could be further frustrated by Murchison's largest shareholder - Harbinger Capital Partners - which holds a 9.11 per cent stake in Midwest.
Midwest directors Dato David Law and Datuk Roger Tan, which hold about 13.1 per cent of the company between them, are yet to decide whether to accept the Sinosteel offer.
Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.
Source: News.com.au
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