Australia’s Arrium rejects $1-bn bid from Noble, Posco consortium

Australian iron ore miner and steelmaker Arrium today rejected an unsolicited $1-billion takeover offer from an Asian consortium led by Hong Kong-based commodities giant Noble Group, South Korean steelmaker Posco and others.

In a filing with the Australian Securities Exchange, Arrium, formerly known as OneSteel, said that after the market closed on Friday it received an unsolicited proposal from a consortium comprising of Noble, Posco, the National Pension Service of Korea, Korea Investment Corp and Korea Finance Corp.

''The proposal was stated to be conditional, incomplete and non-binding,'' Arrium said in the filing. "We also believe that the highly conditional nature of the proposal carries significant risk," it added.

The consortium's conditions to the offer include a six-week due diligence period, negotiations with existing lenders, no dividend payment, and no material adverse change to the company's operations or capital structure.

The consortium has offered A$75 cents a share, 8 per cent higher than Arrium's three-month average stock price. Arrium share price closed at A$54.5 cents on Friday.

Arrium's shares were as high as $1.36 in May, before the iron ore price started to decline due to the global economic crisis that has affected steelmakers and in turn iron ore miners.