September 08, 2008

Sinosteel lifts stake in Midwest to 18.7% last week end

It is reported that China's Sinosteel Corporation has acquired an 18.7% stake in takeover target Midwest Corp Ltd, following heavy trading the iron ore company's shares on weekend.

A substantial shareholding notice lodged on Tuesday with the Australian stock exchange said that Sinosteel had lifted its interest from 11.1% on Thursday to 18.7% on Friday. Some 22.5 million Midwest shares worth $117.6 million changed hands on Friday.

A report in the South China Morning Post last week said Sinosteel was seeking a stake of about 20% to increase its bargaining power in regard to securing further off-take agreements with Midwest. Sinosteel in December made an AUD 1.15 billion incomplete and non binding bid for Midwest of AUD 5.60 a share as compared to an earlier scrip bid from Midwest rival Murchison Metals Ltd of around AUD 719 million.

SinoSteel already has an off take agreement in place for Midwest's Weld Range hematite project.