Arrium Mining surges after spurning billion dollar bid

Australian steelmaker and iron miner Arrium (ASX:ARI) has seen its shares surge after rejecting a $1 billion takeover bid for the company's mines and blast furnace.

The consortium, comprised of Hong Kong-headquartered Noble Group (SGX:N21), Posco (KS:005490) and three Korean financial institutions, issued the unsolicited bid for the company at AUD$0.75 per share, for a total consideration of AUD$1.01 billion.

Reuters reports that Arrium, formerly known as One Steel Ltd, rejected the bid on the grounds that it was undervalued and conditional.

The rejection comes just as cash-flush Asian companies led by export titan China have been snatching up commodities and mining companies around the globe.

Despite a year-on-year decline in Asia-Pacific mining deals of 23% so far this year, take-overs are expected to surge during the remainder of the year as valuations approach record lows on recent commodity price dives.

The consortium sought to take over Arrium's iron ore mines on South Australia's Eyre Peninsula, in which the company has invested hundreds of millions over the past several years, as well as its Whyalla steelworks.

Shares in Arrium rocketed 25% in Monday morning trading following a month of steep declines due to tepid demand.