UPDATE 1-Sinosteel launches A$1.2 bln hostile bid for Midwest

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SYDNEY, March 14 (Reuters) - China's Sinosteel Corp launched a A$1.2 billion ($1.1 billion) hostile takeover bid for Australian iron ore prospector Midwest Corp Ltd (MIS.AX: Quote, Profile, Research) on Friday, as it aims to lock up scarce long-term iron ore supplies.

Sinosteel's all-cash offer was pitched at A$5.60 a share, a 35 percent premium to Midwest's last traded price. The offer is subject a minimum 50.1 percent acceptance and Sinosteel receiving Chinese regulatory approvals.

Sinosteel, a steel commodities trader which already owns a 19.9 percent stake in Midwest, said it has received Australian Foreign Investment Review Board approval for the bid.

The unsolicited bid comes after Midwest last month rejected a previous attempt to win the company's support for an agreed bid, also at an indicative price of A$5.60 each.

A plan for a merger between Midwest and Murchison Metals Ltd (MMX.AX: Quote, Profile, Research) also collapsed last month after Murchison failed to win over Midwest's board.

Sinosteel's President Tianwen Huang said in a statement the offer would be highly attractive to Midwest shareholders.

"We have made this offer directly to Midwest shareholders as we firmly believe it provides Midwest shareholders with the opportunity to realise certain value in cash for their shares at a a significant premium to historical trading levels," he said in a statement.

JP Morgan is the financial advisor to Sinosteel, while EXIM Bank of China has committed to provide funding for the deal.