The Wall Street Journal-20080126-Sinosteel May Drop Australian Miner Bid
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Sinosteel May Drop Australian Miner Bid
MELBOURNE, Australia -- Sinosteel Corp. appears set to drop a A$1.2 billion ($1.06 billion) bid for iron-ore developer Midwest Corp. after a major shareholder in the miner told the Chinese group he wouldn't accept its offer, a person familiar with the situation said Friday.
David Law, a Midwest director who holds a 13.3% stake in the Perth, Australia-based company, told Sinosteel he wouldn't accept its proposed offer of A$5.60 a share, the person said.
Mr. Law "doesn't support the takeover and therefore in that circumstance Sinosteel has got no current intention of making an offer," the person said.
People with knowledge of the company said a group of investors from Singapore, Malaysia and Hong Kong followed Mr. Law into Midwest and support his stance. Mr. Law wasn't immediately available for comment.
Market watchers have seen the proposed takeover of Midwest by state- backed Sinosteel as a sign China was stepping up its investment in the Australian resources sector.
Midwest said Sinosteel now has a stake of more than 10%.
