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Thursday 20th of November 2008
Wednesday, February 6, 2008

Closer of offer for Midwest

Story link: Closer of offer for Midwest
by Jo Black
Closer of offer for Midwest

Murchison Metals Limited announces that its offer for Midwest Corporation Ltd will not be extended beyond the scheduled closing time of 5pm (Perth time) on Wednesday, 6 February 2008.

Murchison Executive Chairman Paul Kopejtka said that the Murchison board had decided to close the offer because recent discussions with key shareholders in Midwest had convinced Murchison that there was no realistic prospect in the short term of reaching agreement on terms that would deliver an acceptable value outcome for Murchison shareholders.

Murchison notes that 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. Murchison’s decision to close its offer is based in part on the fact that Sinosteel has advised Midwest that it does not intend to make an unsolicited takeover offer.

Mr Paul Kopejtka said that we remain of the view that a merger of Midwest and Murchison is a compelling proposition that would generate significant value for Midwest shareholders over and above that which Midwest will be able to generate on a stand alone basis.

Jack Hills and Weld Range remain highly complementary projects that have similar ore types, are located in the same geographic region, have similar development timetables and will rely on the same rail and port infrastructure, he said. A combination of the two companies may also have avoided the need for a contestable process to award the rights to construct the new mid-west port and rail infrastructure, thereby expediting the construction of that infrastructure. However, without the support of the board and major shareholders of Midwest there is little point in keeping our offer open.

Whilst we remain of the view that a combination makes sense for all parties, our focus is on driving shareholder value. At this point we believe the interests of our shareholders are best served by closing the Midwest offer and continuing to focus our efforts on the development of the Jack Hills mine and associated infrastructure in joint venture with our partner Mitsubishi.

Mr Kopejtka said Murchison looked to the year ahead with great confidence.

 

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