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After launching a takeover bid for Midwest Corporation on 14 March 2008, Sinosteel Corporation has announced that as at 25 August 2008, it had) acquired 59.53% of the Company’s shares.
Effective from 11 July 2008, the Company has welcomed 3 new Directors nominated by Sinosteel. Details of Mr. Tony Cheng, Mr. Michael Wu and Mr. Ian McCubbin can be read in announcements below, and on the Company’s website.
Sinosteel has confirmed that $6.38 per share is its Final Offer Price and on 30 May 2008, has confirmed that this offer price is payable unconditionally. In other words, the previous condition attaching to this $6.38 price of Sinosteel receiving 50.1% acceptances of Midwest shares has now been removed.
Sinosteel has also announced that its Offer Period has been extended to 5.00pm(WST) on 15 September 2008. This will be the final extention, and the bid must close on that date.
Sinosteel has announced accelerated payment terms – this means that it will shorten the period within which it will pay Midwest shareholders the offer consideration, so that cheques will be sent within 10 business days after the later of the acceptance being processed or instructions being implemented by Sinosteel.
For full details of the accelerated payment, please refer to Sinosteel’s “Eight Supplementary Bidders Statement”, on the list of announcements below.
For full details you should review Midwest's ASX announcements below, or call the Midwest Shareholder Information line on the relevant number at the bottom of this page.
On 7th July, Murchison Metals Limited (Murchison) withdrew its merger proposal of 26 May 2008, Midwest.
Shareholders should refer to the announcements of Murchison and Midwest of 7 July 2008 (below) for fuller details.
Midwest’s position is that whilst it continues to believe that in the medium to long term, the potential additional value created by a merger with Murchison would be substantial and the strategic logic of the merger remains compelling, the re-rating of the Midwest stock has not occurred as anticipated and some substantial Midwest shareholders, particularly Sinosteel Corporation, Sinosteel Ocean Capital Pty Ltd and associated companies, have not embraced the merger proposal on the terms proposed by Murchison.
Murchison withdrew its merger proposal citing the unwillingness of Sinosteel “to support the merger on terms which would be acceptable to Murchison” and “the unexpected decision of a number of key investors to accept Sinosteel’s offer so soon after the merger was announced and for a price which was below the then market price”.
On the same date, Murchison announced that it did not intend to accept Sinosteel's cash offer in respect of Murchison's 10% holding in Midwest, which, it stated, made it “unlikely that Sinosteel will reach ownership of 90% of Midwest shares, and will therefore be unlikely to be able to compulsorily acquire Midwest shares which are not accepted into Sinosteel's offer”.
With the withdrawal of the Murchison merger proposal on 7 July 2008, Midwest’s Directors made the following recommendations to its shareholders:
- If you are a Midwest shareholder with a shorter-term investment horizon who may prefer the certainty of cash or are otherwise considering selling your Midwest shares during the Sinosteel offer period, you should consider either selling your shares on market at prices above Sinosteel's Offer price of $6.38 if such a price is available, or, if the market price is $6.38 or below, accepting Sinosteel's takeover offer;
- If you are a Midwest shareholder with a longer term investment horizon, then you may want to participate in Midwest's future as a stand-alone company and retain your Midwest shares.
In respect of the second option above, shareholders should consider that their investment will be in a company with a controlling party owning near or over 50% of shares on issue. In such circumstances, it may be that liquidity in the Company’s shares will greatly diminish. Shareholders should consider this when making their decision.
Shareholders who retain their Midwest shares remain able to accept a superior proposal if one emerges.
Shareholders who have further questions, or would like more information, can contact our dedicated Shareholder Information line:
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