Flinders Mines Takeover Caught In Magnitogorsk-ENRC Dispute

The Australian-based assets of Russian steelmaker Magnitogorsk Iron & Steel Works (MAGN.RS) have been frozen by an Australian court in a dispute with U.K.-listed, Kazakh-focused diversified miner Eurasian Natural Resources Corp. PLC (ENRC.LN), Magnitogorsk's takeover target Flinders Mines Ltd. (FMS.AU) said Thursday.

Flinders said that an order Nov. 25 by the Federal Court of Australia, freezing A$857.6 million of Magnitogorsk's assets in Australia, wouldn't affect the steelmaker's ability to carry out its A$0.30 per share offer for the company, announced the same day.

The offer values Flinders, which has several promising iron ore tenements in the Pilbara region of northwestern Australia, at A$554 million.

"Magnitogorsk has informed Flinders it is of the view that the freezing order currently in place does not and will not impact on Magnitogorsk's ability to complete the scheme," the company said.

Flinders' directors said they continued to unanimously recommend the scheme of arrangement to take over the company.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]