Shares in Steel & Tube fell 6.6 per cent after ASX-listed mining and minerals group, Arrium said it will sell its 50.3 per cent stake in the local construction and materials supplier for about $91.2 million.
The stock fell to $2.26 from $2.42. It has gained 17 per cent this year and is rated an average 'hold' based on three analyst recommendations compiled by Reuters.
"The way the market has been performing over the last few weeks means it will be well supported by investors as they trace higher dividend yield," said Grant Williamson, director at Hamilton Hindin Greene.
The Australian company, formerly known as OneSteel, appointed an investment bank to underwrite and manage the sale of its Steel & Tube stake at $2.05 a share, it said in a statement. That's a 15 per cent discount to the Steel & Tube's closing price yesterday. It expects retail and institutional investors will buy the shares, and will use the cash to cut debt.
Steel & Tube chief executive Dave Taylor said he expects Arrium to remain a key supplier for the firm.