GO
Loading...

Australia's Arrium sells NZ unit, shores up defence against takeover

* Says sale part of strategy to focus on mining

* Steelmakers consortium still interested in Arrium

* Takeover group includes Noble, Posco among others

SYDNEY, Oct 9 (Reuters) - Australia's Arrium Ltd sold its 50.3 percent stake in New Zealand's Steel and Tube Holdings Ltd for NZ$91.2 million ($74.77 million), shoring up its defence against a takeover by a consortium including Noble Group Ltd and South Korea's POSCO .

The Australian steel and mining company said it has hired an investment bank to underwrite the sale of its holding at NZ$2.05 a share, a 15.3 percent discount to Steel and Tube's closing price of NZ$2.42. The proceeds will be used to cut Arrium's debt.

"The sale of our shareholding reflects our strategy to focus on growing our mining and mining consumables businesses," Arrium's chief executive, Geoff Plummer, said in a statement.

Last week Arrium, which has net debt of A$2.14 billion ($2.18 billion), rejected a A$1.01 billion bid by Steelmakers Australia, saying the bid was undervalued and highly conditional .

The Steelmakers Australia consortium , which includes National Pension Service of Korea, Korea Investment Corp and Korea Finance Corp in addition to Noble and Posco, has urged Arrium directors to hold talks to work towards an agreeable offer.

Arrium's iron ore capacity will rise to 11 million tonnes a year by mid-2013 from 6 million tonnes now. It posted an underlying net profit of A$195 million on sales of A$7.6 billion in 2011/12.

($1 = 1.2198 New Zealand dollars) ($1 = 0.9767 Australian dollars)

(Reporting by Narayanan Somasundaram; Editing by Matt Driskill)

((narayanan.somasundaram@thomsonreuters.com)(+61 2 93731815)(Reuters Messaging: narayanan.somasundaram.reuters.com@reuters.net))

Keywords: ARRIUM STEELANDTUBE/