Shares in iron ore supplier, Midwest Corporation (MIS) fell by as much as 5% after WA iron ore exploration group Murchison Metals (MMX) scrapped its takeover offer which valued the target at around $900 million.
Murchison executive chairman Pual Kopejtka said the Murchison board had decided to close the offer because recent discussions with key shareholders in Midwest confirmed there was no realistic prospect in the short term of reaching agreement on terms that would deliver an acceptable value outcome for Murchison shareholders.
He noted that its rival bidder, Sinosteel, which has purchased on market nearly 20% of Midwest, also appears to have been unable to reach agreement with the Midwest board to proceed with a takeover offer for Midwest.
Sinosteel, one of China's largest steelmakers, made a $A1.19 billion cash offer in early December for Midwest Corporation, an Australian iron ore explorer while it was in the throes of fighting off an unwanted approach from Murchison Metals.
Sinosteel bid $5.60 a share, 54% above the spurned offer from Murchison Metals.
The Murchison offer was one new share for every 1.08 Midwest shares.
Sinosteel has an initial joint venture with Midwest to develop two iron ore projects in Western Australia.
Murchison is backed by Japan's Mitsubishi Corp., and bid for Midwest to remove competition to build a port and railways on in the Geraldton area of Western Australia.
Shares in Murchison rose 2 cents to $3.98, while Midwest fell 17 cents to $4.95.
