Final offers for Corus must come by Jan 30
Finally, there is some clarity and a definite time schedule in the battle for Anglo-Dutch steelmaker Corus. The UK’s Takeover Panel on Tuesday set a deadline of January 30, ’07, for the two suitors -Tata Steel and Brazil’s
Companhia Siderurgica Nacional (CSN) – to announce revised offers.
This is likely to stretch the bidding war for another month. If the bidding crosses the deadline, an auction conducted by the panel will decide the winner. “If a competitive situation continues to exist shortly before 30 January 2007…, the Panel Executive may require any revised offers to be published in accordance with an auction procedure, the terms of which will be determined by the Panel Executive,” the panel told the LSE. The auction procedure will be announced later.
Corus, Tata Steel and CSN have consented to the ruling. The move comes after the panel on Monday indicated that it may intervene in the battle to prevent Corus from being subject to a long-drawn siege, affecting its business and the interests of shareholders.
The formal bids by Tata Steel and CSN have been through a scheme of arrangement under the Companies Act. They were not tied under the 60-day timeline that is typically set by the panel for an acquisition referred to it.
The deadline concurs to the 46-day limit usually set by the panel for any offer bid. CSN had presented its formal bid of 515 pence per share on December 11. It came just hours after Tata Steel itself tabled a revised offer of 500 pence per share. According to the Takeover Code, offers are valid for 60 days and bids can be revised till the 46th day.
“Other than bringing a time limit to the takeover battle, the auction also forces the bidders to come up with a comprehensive disclosure and put their best deal forward,” said the finance director of a UK-based company. “As has been seen till now, the two companies have been holding back, trying to guess each other’s moves,” he added.
The Takeover Panel’s intervention also makes the work of the Corus board easier. “This forum (the panel) does the negotiations with the competing parties on behalf of the board, as it knows that a prolonged interface is difficult for shareholders,” said an industry analyst.
Corus shareholders welcomed the panel’s announcement, with the company’s shares rising 0.38% to 530 pence on the LSE, the first rise in three trading sessions. Rumours about Tata Steel pulling out from the race had seen a drop in Corus shares since last weekend.
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