Investors wiped almost 13 per cent from the share price of steelmaker Arrium after its Asian suitor walked away from a $1 billion plus takeover bid.

Shares in Arrium, formerly OneSteel, closed 10 cents, or 12.7 per cent, lower at 68 cents.

The expectation among some investors of capital-raising because of Arrium’s heavy debt load also weighed on the company’s share price on Thursday.

The fall follows an announcement from an Asian consortium late on Wednesday that it would abandon its attempts to engage with the Arrium board after the Australian company knocked back its offer.

Analysts said Arrium would require a bid of at least $1 per share before it opens up its books to a would-be suitor.

The bid consortium, Steelmakers Australia, said it was deeply disappointed with decision by the Arrium board not to grant it the opportunity for due diligence, which would allow the suitor to examine the company’s accounts.

The consortium said it had made a comprehensive proposal that offered a full and fair price.

The consortium includes Hong Kong commodities trader Noble Group, South Korean steel giant POSCO and several investment and pension funds.

Arrium received an improved offer of $1.19 billion, or 88 cents per share, from the consortium on Tuesday.

Its original proposal was 75 cents per Arrium share, made at the beginning of October.

Arrium said the revised proposal significantly undervalued the company, and carried too many risks.

Options Xpress market analyst Ben Le Brun said the highly conditional offer came after the Arrium denied the consortium access to its books.

“It’s opened a Pandora’s box,” Mr Le Brun said.

A takeover bid at 88 cents was attractive for Arrium, which carried a large debt load, but it was unclear whether the company would have to go down the capital-raising path.

“There’s a large degree of investors and shareholders that think they will so that was reflected in the softness in the share price today,” he said.