August 22, 2008

Sinosteel offer for Midwest approved by SAFE

It is reported that Sinosteel's hostile takeover bid for Midwest Corporation Ltd has been approved by China’s State Administration of Foreign Exchange.

Sinosteel noted in an open letter to shareholders of Midwest that the approval indicates the bid does not need the nod of China's Ministry of Commerce any longer hence the clause in previous offer concerning government approval is of no effect now. It said the company has already had Foreign Investment Review Board approval to acquire the Australian company.

Sinosteel issued its bidder's statement for a cash takeover bid of AUD 5.60 per share for the Australian iron ore miner on March 31st. The company now owns 19.89% shares of Midwest and has to persuade at least 30.21% shareholders. The offer has been open since April 14 and the final closing date is March 15. Board of Midwest has advised shareholders to "take no action".

Midwest announced on April 24 to stop a proposal giving share incentive to staffs and independent directors, which was rejected by Sinosteel. The board also said it will make further advices to shareholders on the offer next week.