China’s first hostile takeover. China has moved a step closer to winning its first hostile takeover in Australia after Sinosteel lifted its offer price for Midwest Corp last night and won the approval of the board. Should the deal proceed the Chinese Government backed metals trader will be in a position to grab control of the so-called midwest iron ore province in Western Australia, inland from Geraldton. Sinosteel, which was a friend to Midwest during Murchison Metals’ failed offer last year, turned hostile earlier in the year with a $5.60 a share offer that was eventually cleared by Canberra. Sinosteel emerged with just over 2% of Murchison yesterday and is reported to have withdrawn an application to the Foreign Investment Review board to take a 19.9% stake in Murchison, which is supported by Mitsubishi of Japan. Midwest is reportedly controlled by a group of Malaysian investors who are thought to have around 40% of its shares, with the largest single holding said to be around 13%. That would be why the Sinosteel offer of $6.38 a share is conditional on 50.1% acceptance. Midwest has ambitions to build the Weld Range hematite project which could produce at least 15 million tonnes of iron ore a year . There is a separate Chinese backed plan for a rail and port project through a private company called Yilgarn Infrastructure. Murchison and Mitsubishi are competing against Yilgarn Infrastructure for the right to build port and rail infrastructure to develop projects held by Murchison, Midwest and other iron ore miners in the region. That has been a source of contention between the two companies, and Sinosteel, but it is believed now the bid has been lifted and accepted by Midwest, a lot of apparent complications could disappear. It’s interesting that China is objecting to BHP Billiton bidding for and taking over rival miner, Rio Tinto, while the Australian and WA Government’s don’t seem to have any objections to Chinese interests gaining control of a new iron ore producing area here. That’s another example of Chinese Government hypocrisy and why the Rudd Government should stand up to it. Australian companies are unable to do the same sort of investments in Chinese business. — Glenn Dyer

Customer satisfaction ratings weather interest rate moves. Four official interest rate increases since August plus some re-pricing by the banks on their own initiative might have been expected to do some damage to customer satisfaction scores, but the latest survey results show that banks are holding up remarkably well. Over the six months to March 2008, five of the 10 banks covered by the Roy Morgan Research retail customer survey increased their scores, some by big margins. BankWest’s rating rose 6.7 percentage points to 78.1 per cent (customers who are satisfied), while Bank of Queensland’s score rose six points to 85.1 per cent. Others whose satisfaction scores increased over the six-month period were ANZ, Commonwealth Bank and NAB. Those whose scores fell were Westpac, Adelaide Bank, Bendigo Bank, Suncorp and St George. Business banking customers have been even more generous in their assessments. The latest TNS Business Finance Monitor shows all nine banks in the survey improving their ratings over the past six months. Commonwealth Bank is the big improver in the TNS survey, picking up 9.3 percentage points over the six months for a score of 71.1 per cent (but still lagging well behind its rivals). BankWest increased its rating by 7.5 percentage points to 76.7 per cent. The top rating in the TNS survey went to Bendigo, with a satisfaction rating of 94 per cent, followed by Bank of Queensland, with 89.9 per cent, and St George on 84.2 per cent. The East & Partners business banking sentiment index was up overall by 10 basis points over the previous month (East & Partners does not provide six month comparisons). East & Partners financial markets’ analyst Peter Drennan said it was the best overall score for the 10 banks in the survey since 2006. St George has the top score, at 60.9 per cent, followed by Bank of Queensland (59.7 per cent) and HSBC (56.6 per cent). Commonwealth is at the bottom of the East & Partners survey, with a score of 23.6 per cent, behind Suncorp (29.3 per cent) and Citi (29.8 per cent). — The Sheet

Asian Stocks Fall, Led by Commodity Producers; BHP Declines. Asian stocks fell for the first time in four days, dragged down by commodity producers, after metals and crude oil prices retreated and U.S. consumer confidence tumbled to a five-year low. BHP Billiton Ltd., the world’s largest mining company, led declines after gold and copper slumped. Inpex Holdings Inc., Japan’s biggest oil explorer, and Woodside Petroleum Ltd. of Australia retreated as oil slumped the most in a month. Honda Motor Co., which gets more than half its sales from North America, slipped the most in a week. The MSCI Asia Pacific Index fell 0.9 percent to 149.66 as of 9:43 a.m. in Tokyo, the steepest drop since April 18. A measure of raw-materials producers had the biggest decline among the index’s 10 industry groups. Japan’s Nikkei 225 Stock Average dropped 0.7 percent to 13,791.32. Japan’s markets were closed for a public holiday yesterday, when the MSCI Asia Pacific excluding Japan Index slipped 0.5 percent. — Chua Kong Ho, Bloomberg

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