Australia's Midwest backs $1.3 bln Sinosteel bid

By James Regan

SYDNEY (Reuters) - Midwest Corp Ltd (MIS.AX: Quote, Profile, Research, Stock Buzz) on Tuesday recommended a revised A$1.36 billion ($1.27 billion) offer from Sinosteel, ending resource-hungry China's first hostile foray into Australia's mining sector.

The A$6.38 per share offer falls short of the A$7 price target set by Midwest's chief executive Bryan Oliver, but represents a 13.9 percent increase over Sinosteel's previous offer of A$5.60 a share.

Midwest was last quoted at A$6.10 before trading in its shares was halted early on Tuesday.

The new offer by Sinosteel, which already owns 19.9 percent of Midwest, is conditional on it winning at least 50.1 percent acceptance.

Oliver told reporters the offer provides Midwest's shareholders with a degree of certainty amid market volatility.

He said the unanimous recommendation by Midwest's board, subject to no higher offer emerging, did not necessarily mean directors would sell Sinosteel their own shares, representing about 16 percent of the company's outstanding stock.

"At this stage the directors have not had a chance to consider their own personal positions," Oliver said.

Midwest earlier this year fought off an unsolicited offer from neighboring prospector Murchison Metals Ltd (MMX.AX: Quote, Profile, Research, Stock Buzz).