Harbinger buys 8% stake in Midwest

New York based investment house, Harbinger Capital Partners, has purchased an 8.1 per cent stake in Midwest Corporation Ltd, adding to the likelihood Midwest's merger with Murchison Metals Ltd will win shareholder backing.

Harbinger, who already holds an 18.9 per cent stake in Murchison Metals, purchased 17 million shares in the iron ore miner.

With both Murchison Metals and Chinese steel trader Sinosteel placing offers to take over Midwest, the 8.1 per cent stake purchased by Harbinger will give the company increased power when shareholders vote on the merger proposals.

This comes after Sinosteel revealed yesterday it would not increase its offer for Midwest beyond $6.38 per share, extending the closing date to June 13.

Murchison's 1.65 billion all stock offer has a much higher implied value, however Sinosteel believe its $1.36 billion cash offer will prevail.