An Asian consortium led by Hong Kong-based commodities giant Noble Group and South Korean steelmaker Posco, today dropped plans of buying Arrium Ltd, after the Australian iron ore miner and steelmaker rejected the consortium's sweetened A$1.2-billion ($1.24 billion) offer.
"Steelmakers Australia has determined it will cease seeking engagement with the Arrium Board," the consortium said in a statement.
While rejecting the 17-per cent sweetened offer, Peter Smedley, chairman of Arrium, said, "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."
In a filing with the Australian Securities Exchange, Arrium, formerly known as OneSteel, in end September that it has received an unsolicited proposal from a consortium comprising of Noble, Posco, the National Pension Service of Korea, Korea Investment Corp and Korea Finance Corp.
On 1 October, Arrium rejected the consortium's offer of A$75 cents a share, 8 per cent higher than the company's three-month average stock price, valuing the Sydney-based company at $1-billion. (See: Australia's Arrium rejects $1-bn bid from Noble, Posco consortium)
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 affected steelmakers and in turn iron ore miners.