Australian steelmaker Bluescope Steel has emerged as a big shareholder in takeover target Steel & Tube.
Bluescope Steel, which owns New Zealand Steel, has bought a near 16 percent stake in Steel & Tube for $A42.3 million ($NZ46m), from investment company Milford Asset Management.
Earlier this week, Steel & Tube rejected a revised takeover offer by Fletcher Building because it was too low and might have raised problems with competition regulators. Fletcher Building has since withdrawn the offer.
Milford was one of the institutional shareholders which was interested in the Fletcher bid.
New Zealand Steel operates a mill at Glenbrook, south of Auckland, and supplies products to Steel & Tube.
"Neither BlueScope nor New Zealand Steel has any intention to make a takeover offer for Steel & Tube," the Australian company said in a brief sharemarket note.
Milford's managing director Brian Gaynor said once Fletcher Building walked away from Steel & Tube there was little prospect of a new takeover offer emerging, and when Bluescope offered to buy its stake it made sense to sell.
"We were disappointed that the Steel & Tube board weren't prepared to put the offer from Fletcher Building to shareholders. We thought that shareholders should have an option to decide for themselves whether they thought $1.90 was fair," Mr Gaynor said.
"We got a phone call at about 6:30 last night offering to buy our shares at $1.75 and we decided... we would accept that offer in respect of all the shares we held in Steel & Tube."
Steel & Tube said Bluescope was a major supplier and it was comfortable with it as a significant shareholder as well.
"You don't have to be Einstein to work out why BlueScope would've wanted to take a significant share in our business," chief executive Mark Malpass said.
He said the fact Bluescope now owns part of Steel & Tube would not influence where it buys.
"We will obviously continue to source our products from the best and most competitively priced mills for our customers," Mr Malpass said.
An investment analyst said Bluescope's investment would help maintain competition in the steel products market and deter other suitors.
"The proposed takeover of Steel and Tube by Fletcher Building is now definitively over," Matt Henry of Forsyth Barr said in a note.
Steel & Tube's share price fell nearly 5 percent as investors decided it was no longer a takeover target.