China Withdraws $435 M Takeover Bid Into Iron Ore Miner Western Desert

In a move that caught Australian iron ore miner Western Desert Resources (WDR) off guard, its lone suitor Chinese company Meijin Energy Group has withdrawn its $435 million takeover bid into the Northern Territory-based company.

Investor confidence was immediately affected, triggering shares to plummet 61 cents per share in early trade on Tuesday, before recovering to close at 64 cents per share.

In a statement, the minerals explorer described the withdrawal as "unfortunate."

"Only Meijin know the true reasons for their surprising decision this morning," Norm Gardner, Western Desert managing director, said.

"We are of the view that the decision not to proceed was not actually based upon the WDR business or its potential."

Still, WDR said it remains committed to develop its flagship Roper Bar iron ore project in the Northern Territory. It is expected to start mining by May 2013.

Mr Gardner likewise remained firm the company will make its first iron-ore shipment by October 2013.

Last September, Meijin proposed a $1.08 per share conditional takeover offer to acquire WDR. The WDR supported the offer.

Meijin is China's largest private commercial coke producer.

WDR booked a net loss of $3.4 million in the 2012 financial year.

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