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Arrium awaits a better offer

PURSUIT of Arrium is becoming an increasingly expensive affair for a foreign consortium involving Korean steel maker Posco, with the stock soaring more than 8 per cent yesterday on the back of renewed takeover speculation.

Shares in Arrium are now 17 per cent higher than the 75¢-a-share offer that was lodged earlier this month, with investors seemingly convinced the consortium will raise its offer price above the billion-dollar bid lodged in early October.

But the consortium has suggested that any improvement to the 75¢ offer will be difficult without Arrium granting access to its books.

The consortium has confirmed it sought to re-engage with Arrium recently, after seeking to allay some of the iron ore and steel producer's concerns with the initial bid.

There was no improvement to the offer price, but the consortium claimed it offered to waive exclusivity rights, shorten the period of due diligence and produce a letter of high confidence from its own banks, thereby solving some problems Arrium raised with the initial bid.

Arrium refused to re-engage given the 75¢ offer had not been improved, leaving the consortium ''dismayed''.

''We need due diligence in order to fully understand the value of the company,'' said a spokesman for the consortium, which also involves commodities group Noble and several Korean funds.

But an Arrium spokesman said the alterations were illusory given the deal remained subject to due diligence, and the company had no appetite for discussing what it considered to be essentially the same offer it had rejected previously.

Arrium shares closed 6.5¢ higher at 87¢.