Fletcher Building had proposed a takeover for $1.95 per share in cash and dividends, worth more than $340million, but withdrew the offer after it was rejected twice by Steel & Tube's board.
Yesterday, Steel & Tube's largest shareholder, Milford Asset Management, sold its 15.8% stake in the company to NZ Steel, a subsidiary of Australian-listed Bluescope Steel for $A42.3million ($NZ45.8 million).
In paying $1.75 per share, NZ Steel paid a 17% premium for the stake.
The blocking stake means no suitor can attain a 90% shareholding, which carries the right to compulsorily buy out the remaining 10% of shareholders.
Steel & Tube shares were down more than 4% to $1.43 following the announcement, and are down more than 21% on a year ago.
In a note to the ASX, Bluescope said Steel & Tube was a customer of NZ Steel and neither company had any intention of making a takeover offer.
It had been estimated a merger of Fletcher and Steel & Tube would have given it a more than 50% market share in the steel manufacturing and distribution market in New Zealand.
Forsyth Barr broker Damian Foster said he saw significant defensive value in NZ Steel owning a blocking stake against any Fletcher Building takeover of Steel & Tube.
''The proposed takeover of Steel & Tube by Fletcher is now definitively over,'' he said.
The defensive values lay in ensuring Steel & Tube's volumes would likely be maintained through its links to the NZ Steel and Bluescope supply chain, he said.
NZ Steel, which acquired Fletcher's Pacific steel and rolling mill in 2014, is a major supplier of long products, reinforcing and coloured roofing. Its brands include Colorsteel, Axxis and Zincalume, BusinessDesk reported. For its year to June, NZ Steel reported an 11% increase in sales to $A833.6million.
