At its AGM today, Murchison Metals (MMX) said that it has not ruled out offering an additional sweetener to get its all-scrip takeover bid accepted by Midwest Corporation (MIS)
Murchison Chairman Paul Kopejtka told shareholders that the takeover proposal makes sense on every level -operationally, corporately and financially.
"Our challenge is now to persuade the Midwest board and its key shareholders that combining the two companies and the two projects will be in the best interests of ALL of the shareholders in both companies."
Murchison's board will discuss its options in the next few days, chairman Paul Kopejtka told shareholders at the company's annual general meeting on Friday.
He said the three options available were to wait for the bid to close on December 6, extend the offer date, or extend the offer date with a revised bid.
Murchison Metals' had made a $1 billion-plus scrip takeover offer which Midwest's shareholders have officially rejected.
The Midwest Board confirmed in writing earlier this months that Murchison's current offer materially undervalues Midwest relative to Murchison.
Midwest and Murchison are both developing iron ore projects in the mid-west region of Western Australia and are in competition to develop a new deep water port at Oakajee near Geraldton and a railway to move the iron ore from mines to the port.
By acquiring Midwest, Murchison would have removed its main rival for the $3 billion development.
Murchison managing director Trevor Matthews said the combined entity remained a compelling proposition but would not be pursued at any cost.
"There is a limit to what we would be prepared to offer," Mr Matthews said.
Mr Kopejtka said Murchison was assessing new opportunities, which could include a bid for another iron ore company or acquisition of new tenements.
Nevertheless, the Western Australian Mid West region would remain Murchison's key area of focus.
At the AGM, Mr Kopejka also addresses the legal action taken against Murchison yesterday by minerals exploration company Chameleon Mining NL
The claim relates to Murchison and Crosslands' alleged use of Chameleon's funds, about $575,000, to acquire the tenements that comprise the Jack Hills iron ore project in Western Australia.
Mr Kopejtka said the claim appears to have no substance and had been designed to put maximum pressure on Murchison.
"We refuse to countenance any settlement of the claim … and will take all steps to deal with this issue as quickly as possible," he said
Dragging some skeletons out of the closet, Mr Koptejka said a representative of Chameleon, Jeff Braysich, who approached Murchison earlier this year regarding the matter, had recently been convicted of multiple counts of market rigging.
Mr Kopejtka said Murchison is close to shipping the milestone one million tonnes of ore and with a the iron ore price predicted to grow by as much as 30%, the outlook for the company was positive.
Shares in Murchison were 12 cents higher to reach $4.01.
Midwest's shares rose by 10 cents to close up at $4.08.
