Murchison launches takeover bid for Midwest
11 October 2007
Murchison Metals launched a hostile bid of up to US$986 million for rival iron ore miner Midwest Corporation, the Financial Times reported. The bid is seen as part of a strategic rivalry between China and Japan for Australia's resources. Murchison is backed by Japan's Mitsubishi while Midwest is backed by Sinosteel, a Chinese state-owned entity. Murchison and Midwest are competing to build infrastructure worth US$2.7 billion needed to support mining in Australia's Midwest region. Talks between the two to reach a compromise have failed. Murchison is offering up to US$4.22 a share, a 200% premium to the price at which Midwest executed a rights issue in May. If Murchison succeeds, Midwest shareholders will control 32% of the enlarged group.