Crossroads

At the intersection of technology, finance and the Pacific Rim.

Saturday, July 12, 2008

Sinosteel, a Chinese state owned enterprise is nearing the acquisition of Midwest, an iron ore producer. The deal was marked as perhaps the first Chinese hostile deal.

Sinosteel, controlled by the Chinese government, originally started a hostile bid for Midwest in March. That provoked an Australian company, Murchison Metals, which had failed in an earlier bid for the company, to re-enter the fray with an all-share offer.
After Sinosteel raised its bid to 6.38 Australian dollars, or $6.15, a share from 5.60 dollars, the Midwest board took the unusual step of recommending both bids.
Murchison, which owns 10 percent of Midwest, pulled out of the battle after its share price plunged and Sinosteel's holding passed the 45 percent mark.

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