Murchison Metals says its planned merger with Midwest Corporation will not be affected by an interim investment review board order relating to Sinosteel’s bid to acquire the assets of or a substantial stake in Murchison.
The order published in the Commonwealth Government Gazette under the Foreign Acquisition and Takeovers Act relates to an application by China’s Sinosteel to the Foreign Investment Review Board (FIRB) in relation to Murchison in May, it said.
“The order made by FIRB is an interim order only, indicating that the Treasurer has made no decision on Sinosteel’s application in relation to Murchison,” the company said.
“It should not be interpreted as giving any guide as to how the Treasurer will ultimately respond to the application.”
Treasurer Wayne Swan said today the Federal Government welcomed foreign investment, and from China.
He rejected suggestions the Government had delayed a bid by China’s state-owned Sinosteel to acquire a substantial interest in Murchison.
“That final decision will be taken in the next 90 days,” he said.
“We welcome foreign investment. We welcome it from everywhere, including from China, but we will apply decisions on a case-by-case basis in the national interest.”
FIRB’s interim order prevents Sinosteel from acquiring more than 15% of Murchison while the Treasurer considers its application for approval, Murchison said.
Observers of the long-running bidding war for Midwest expect Sinosteel to make a play for Murchison, given the iron ore miners have adjacent operations in Western Australia’s mid-west region.
Ownership of both Midwest and Murchison will give Sinosteel the prime position in the mid-west’s emerging iron ore province.
It will also have significant implications for a limited tender process that is under way with the WA Government to build and operate new port and rail infrastructure in the region to support the mines.
Midwest and Murchison are the only proponents for this tender.
Sinosteel already holds a 2.4% stake in Murchison and its stake in Midwest is 43.62%.
The FIRB has approved Sinosteel’s $1.36 billion cash offer for Midwest, which is scheduled to close on July 18.
Shares in Murchison were 4 cents lower at $3.52 in afternoon trading, while Midwest’s shares were down 13 cents, or 2%, at $6.45.