Flinders Mines Ltd. (FMS), the Australian iron ore developer being taken over by OAO Magnitogorsk Iron & Steel (MAGN), plunged the most in three and a half years after a Russian court blocked the transaction.
Flinders fell as much as 21.6 percent to 23.5 Australian cents, the most since Oct. 10, 2008, and traded at 25 cents as of noon in Sydney. The key S&P/ASX 200 Index fell 0.4 percent.
Elena Egorova, who owns less than 0.001 percent of MMK, won an order from the arbitration court of Chelyabinsk on March 30 preventing the Russian steelmaker from implementing the board’s decisions on the A$554 million ($569 million) deal. The transaction is against shareholder interests, she argued.
The Federal Court of Australia adjourned a second hearing of the case to a “date to be advised,” Flinders said in a separate statement yesterday.
MMK agreed in November to buy Flinders, which has rights to an untapped Pilbara field in Western Australia. The transaction was approved by Flinders shareholders on March 30 and was expected to be cleared yesterday by the Australian court.
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