Australian steelmaker and iron ore miner Arrium Ltd has junked a modified and increased takeover bid from a group led by Noble Group Ltd and POSCO, among others, claiming the sweetened A$1.2 billion ($1.24 billion) still failed to properly value the company's worth.
"The revised proposal is opportunistic. It comes as iron ore prices are rising and after we have shipped the first ore from our new mine two weeks ago," chairman Peter Smedley said in a statement.
Steelmakers Australia, whose members, apart from South Korea's Posco and Hong Kong's Noble, also include National Pension Service of Korea, Korea Investment Corp and Korea Finance Corp, increased its earlier rejected 75 cents-per-share bid for Arrium to 88 cents-per-share, Arrium said on Wednesday.
Before being placed in a trading halt ahead of the announcement of the revised bid, Arrium shares last traded at 80 cents-per-share.
"We believe that the revised proposal significantly undervalues Arrium and is not in the best interests of Arrium shareholders," Mr Smedley said. "We also believe that the highly conditional nature of the proposal carries significant risk."
The Arrium chairman noted Arrium has an attractive portfolio of businesses including a world class mining consumable business and an iron ore business which is performing well and has very attractive growth options.
On this alone, it deserved a far better takeover approach than the 88 cents-per-share, albeit a 17 per cent improvement over the previous bid that was rejected, that the consortium offered.
"Moreover, the expansion of our mining operations and port remain on track," he said.
Analyst Michael Slifirski from Credit Suisse said in The Sydney Morning Herald that an offer closer to $1.10 per share would be taken in more seriously by the Australian steelmaker.
Arrium was formerly known as OneSteel.