Probably more to do with this from the AustralianIRON ore...

Probably more to do with this from the Australian

IRON ore developer Murchison Metals has boosted its stake in rival Midwest amid speculation it is poised to announce a fresh takeover offer, challenging a recommended bid from China's Sinosteel.

Both Murchison (ASX: MMX: quote) and Midwest (ASX: MIS: quote) were placed into trading halts before the market opened today, with Murchison citing an upcoming announcement of a "proposed significant transaction".

A substantial shareholder notice released to the Australian Securities Exchange then revealed Murchison had boosted its stake in Midwest to 9.98 per cent from 4.78 per cent with Murchison paying $6.38 per share for the new shares last week.

That $6.38 is in line with the price being offered by Sinosteel in its $1.36 billion all-cash offer for Midwest, which has been recommended by the miner's board.

Murchison launched a failed bid for Midwest last year pitched at one new Murchison share for every 1.08 Midwest shares held, which valued Midwest at A$986 million at the time.

Murchison abandoned its offer after Sinosteel appeared on the scene and after a decline in its share price lowered the value of its all share bid.

But Perth-based Murchison has continued to point out the synergies that could be generated by bringing together the two companies and their neighbouring iron ore developments in the mid-west region of Western Australia.

There is speculation among market participants that Murchison will unveil a fresh offer today, with talk that the bid will again be an all-share offer, and some suggesting an agreed merger between the two.

Murchison Metals was not immediately available for comment and a spokesman for Midwest declined to comment.