SINOSTEEL Corp said it has further boosted its stake in Australian iron ore prospector Midwest Corp to more than a third and may buy more shares in the firm at or below its offer price.
The Chinese state-owned metals trader is battling Murchison Metals Ltd for Midwest. Murchison, whose main shareholder is US hedge fund Harbinger Capital Partners Ltd, proposed a merger with Midwest.
Sinosteel told shareholders of Perth-based Midwest that it had increased the stake to 33.82 percent yesterday from 28.37 percent a day earlier, and said it may buy further shares at or below its A$6.38 (US$6.10) offer price, which it had said is final.
Midwest fell 4.31 percent to A$6.44 in Australia, 6 cents above Sinosteel's offer price.
Beijing-based Sinosteel also said Harbinger's acquisition of shares in Midwest violated Australian law, as Harbinger's stake in Midwest could make the two firms associates, which breached the Foreign Acquisition and Takeovers Act as they had not declared sufficiently their share holdings in Midwest.
Sinosteel has asked Australia's Takeovers Panel to stop Murchison and Harbinger from buying further Midwest shares until they comply with the FATA requirements, according to the panel, which governs mergers and acquisitions.
The panel said it has not decided whether to conduct a probe as requested by Sinosteel.
Earlier this year, the panel blocked Chinese steel maker Shougang's plan to buy a stake in miner Mount Gibson Iron Ltd because of Shougang's links with an existing shareholder.