CSN stuns Tatas with $9.6-bn bid
Tops 500 pence a share offer for Corus
Within hours of Tata Steel sweetening its original bid for Corus Group Plc to 500 pence a share, Brazil’s fourth-largest steelmaker Cia Siderurgica Nacional SA (CSN) on Monday made a formal counter-bid at 515 pence a share in cash, 3% higher than Tata Steel’s offer.
“Tata Steel has noted the development and will consider its position,” a company spokesperson said. Industry observers, however, predict an “open game”, with the takeover battle poised for dramatic twists and turns over the next few days.
The Corus board has backed the revised CSN bid, although earlier in the day, it had supported Tata Steel’s offer. CSN’s offer values Corus at $9.6 billion and is subject to Corus shareholders rejecting Tata Steel’s bid.
Corus postponed its EGM to December 20 to enable CSN to table a counter-bid to Tata Steel’s original offer.
Though a Tata Steel statement stressed a “compelling strategic rationale” behind raising the bid to 500 pence in response to the earlier 475 pence counter-bid proposed by CSN, the company stock dipped 6% on the BSE on Monday to close at Rs 453.40. The benchmark Sensex also fell 400.06 points during the day.
Meanwhile, the shares of Corus, the world’s eighth largest steel producer, soared to 527 pence on the LSE on Monday as investors saw a prospect of a bidding war.
“It is structured as an all-cash deal, so the highest bidder will win,” said Hitesh Agrawal, an analyst with Angel Broking. “However, it all depends on whom the management will support. Raising the bid by another 3% is not too difficult for the Tatas,” he added.
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