Australia limits Harbinger’s role in Midwest bid

June 23, 2008

June 23rd (Reuters) – Australia’s takeovers panel ruled on Monday that U.S. hedge fund Harbinger Capital cannot vote a chunk of its major shareholding in Australian iron ore prospector Midwest (MIS.AX: Quote, Profile, Research, Stock Buzz), pending the outcome of a bid for Midwest.

Chinese metals trader Sinosteel has made a A$1.36 billion ($1.30 billion) bid for Midwest to take control of its iron ore reserves in the Yilgarn region of Western Australia, which could be transformed into a major iron ore province. The panel found fault with Harbinger, saying it had bought 4.27 percent of Midwest on the market last month without giving notice under a foreign-takeovers law. The panel said it could not vote those shares while the Sinosteel bid was on foot. If Harbinger failed to secure approval by July 11, it would have to sell the 4.27 percent stake within three trading days.

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