HONG KONGâ€"The Australian miner and steelmaker Arrium said Monday it had rejected a takeover offer of 1.01 billion Australian dollars, or $1.05 billion, from a consortium led by the Hong Kong-based commodities trader Noble Group and the South Korean steelmaker Posco.
In a statement that both disclosed the unsolicited bid and announced its rejection, Arrium's chairman, Peter Smedley, described the approach as ‘‘opportunistic,'' saying the offer undervalued the company and its growth prospects.
The bidding consortium - Noble, Posco's Australian unit, the National Pension Service of Korea, the Korea Investment Corporation and Korea Finance Corporation - had offered 75 Australian cents per share on Friday, a 36 percent premium to the stock's closing price that day of 55 Australian cents.
Australia's mining companies have been hard hit in recent months as prices for iron ore, coal, and other key input materials have slumped due to the economic slowdown in the resource-rich country's biggest customer market, China.
Arrium employs 11,000 people. It manufactures and recycles steel while also mining iron ore at its Middleback Ranges site in South Australia for export to China.
Shares in the firm soared 25 percent Monday on news of the takeover approach to close at 68 Australian cents each - but that was still only half of what they traded at as recently as May.
In response to Sydney-listed Arrium's announcement on Monday, Noble Group, which led the bidding consortium, made an announcement to the stock exchange in Singapore, where it is listed, suggesting that the matter was far from concluded.
‘‘At this stage the expression of interest from the consortium is non-binding and incomplete, and the transaction may, depending on how it is finally structured, be subject to conditions, including but not limited to, satisfactory arrangements with lenders with respect to Arrium's debt profile on a change of co ntrol,'' Noble's announcement said.
Arrium has retained UBS as its financial adviser and the firm Allens Linklaters as its legal adviser.
