BEIJING (XFN-ASIA) - Australia's Midwest Corp, which is the subject of a 5.60 aud per share hostile bid by Sinosteel, said an offer of at least 7 aud a share would be needed before a suitor receives serious consideration, the Financial TImes reported.
Citing Midwest chief executive Bryan Oliver, the newspaper said the offer by Sinosteel, China's largest iron ore trading company, did not fully reflect the value of the western Australian group.
'Beijing needs iron ore and Midwest is the crown jewel in the mid-west region (of Western Australia),' the newspaper quoted Oliver as saying.
According to the newspaper, Oliver said Sinosteel's bid for Midwest was part of Beijing's strategy to reduce its reliance on BHP Billiton and Rio Tinto.
The newspaper noted that China is in tense talks with BHP and Rio over iron ore contract prices, and Chinese steelmakers have also publicly opposed BHP's takeover bid for Rio, arguing it would reduce competition in the iron ore market.
But Oliver's mention of 7 aud as 'a minimum value' price raised eyebrows as that is also the level at which options awarded to directors under an incentive plan vest, the newspaper added.
Sinosteel, which already controls 19.89 pct of Midwest, has received Australian Foreign Investment Review Board approval for the offer.
will.davies@afxasia.com - xfnwd/xfntm COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.