Arrium ups forecasts in takeover defence
Arrium has raised its iron ore export forecasts for the coming year, as it continues its campaign to fend off a takeover bid from a foreign consortium.
The steel and iron ore producer hosted investors on a site tour today, and took the opportunity to update guidance for its iron ore exports.
Arrium had previously forecast iron ore exports of about 8 million tonnes for the year to June 30, 2013, but today said that could be as high as 9 million tonnes per annum.
Arrium shares jumped on the news, closing up 4.2 per cent at 74.5 cents. The stock was fetching 54.5 cents last Friday, prior to the 75-cent a share offer.
The company has long promised to be producing iron ore at a run rate of 11 million tonnes per year by mid-2013, but this afternoon the company went further saying it would hit a 12 million tonnes per annum run rate by August 2013.
A slightly bigger export capacity for Whyalla port was also revealed, meaning it will boast a capacity of 13 million tonnes per annum.
The upgrades are the latest sign that Arrium’s iron ore business is the key battleground of the takeover battle that is underway for the company previously known as OneSteel.
Arrium is fending off an approach from a consortium led by Korean steel giant Posco and Hong Kong commodities group Noble.
The consortium offered 75 cents for each Arrium share on Friday night, but was rejected by an Arrium board that believed the bid was lowball and seeking to take advantage of a temporary slump in iron ore prices.
The consortium argues the slump in iron ore prices is not temporary, and their bid reflects a realistic judgement of where iron ore prices are going.