FDL flinders diamonds limited

Midwest t/o offer price was est at $9/ton of iron-ore .If Fdl...

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    Midwest t/o offer price was est at $9/ton of iron-ore .

    If Fdl (or FMS, cousin on FMG)could fetch $4-$5/ton for its
    350Mt, that's worth something.
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    Sinosteel won't rule out higher Midwest bid

    * Midwest spoiler in Chinese iron ore push

    * May 27, 2008 - 11:35AM


    China's Sinosteel has left the door open to a higher bid for iron ore miner Midwest Corp after distancing itself from comments by a senior manager.

    Midwest's former suitor, Murchison Metals, yesterday trumped a takeover offer from Sinosteel, China's largest trader of iron ore, with a $1.53 billion scrip-bid for the company.

    Sinosteel today backed away from previous comments by the group's Australian deputy general manager, William Ren, that it was not prepared to raise its bid for Midwest.

    The Chinese trader said that Mr Ren was "not an official spokesman for the transaction and should not be taken as indicative of Sinosteel's intentions''.

    Sinosteel, which holds 19.89% of Midwest and is offering $6.38 cash per share in a deal worth $1.36 billion, said it would consider "all options'' in its response to the Murchison proposal.

    Analysts from Goldman Sachs JBWere said it was unlikely that Sinosteel would abort its bid for Midwest and allow its strategic stake to be diluted.

    "The other school of thought is that Sinosteel may now wait on the sidelines and let the proposed merger go through and then launch a bid for the combined entity,'' Goldman Sachs said in a client note.

    Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.

    Both companies have agreed that a merger could achieve significant synergies, operationally and through the sharing of infrastructure in the region, with some analysts estimating cost savings up to $400 million.

    Murchison has proposed a merger via a scheme of arrangement, offering one share and an option on issue for every 0.575 Midwest shares, valuing the target's shares at about $7.17 each.

    Murchison has a 9.98% interest in Midwest.

    Shares in Midwest were steady at $7.00 in late morning trade, while Murchison dipped 12 cents or 2.7% to $4.31.

    AAP

    http://business.smh.com.au/sinosteel-wont-rule-out-higher-midwest-bid-20080527-2iik.html
 
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