Tata's revised offer for Corus outbid by Brazilian firm
Monday, 11 December 2006, 18:30 IST
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London/Mumbai: Even as Tata Steel's new bid to takeover Corus Group Plc was approved by the board of the Anglo-Dutch steel-maker, a Brazilian rival made a counter offer Monday, higher than that of the Indian company. Companhia Siderurgica Nacional (CSN) said it was making an offer of 515 pence a share to takeover Corus, that was higher than the offer of 500 pence a share the Tata group had conveyed to the Corus Board Sunday. This takes the bid for Corus to 5.7 billion pounds including debt, compared with 5.1 billion pounds by the Indian firm. Officials at the Mumbai-headquartered Tata Sons said they were considering another offer for Corus. "The boards of Tata Steel and Corus are pleased to announce they have agreed the terms of an increased recommended acquisition at a price of 500 pence in cash per Corus share," the two companies said in a statement after a revised offer. The previous offer on Oct 19 valued Corus at 455 pence a share. "We remain convinced of the compelling strategic rationale of this partnership and revised terms deliver substantial additional value to Corus shareholders," Tata Sons chairman Ratan Tata said. "The revised acquisition terms from Tata Steel are a substantial increase from the previous offer. Accordingly, the Corus Board are pleased to recommend this to Corus shareholders," Corus chairman Jim Leng added. But the markets in India reacted immediately, leading Tata Steel shares dropping as much as three percent on the Bombay Stock Exchange (BSE) as investors feared the higher acquisition price may hurt the profitability of the acquired entity. Merchant bankers dealing with the buy-out said while the financial commitment for 4.3 billion pounds was intact, the Tatas had approached Standard Chartered Bank and Standard Chartered First Bank of Korea for additional finances. "ABN Amro and Deutsche Bank, as joint financial advisers to Tata Steel and Tata Steel UK, are satisfied sufficient resources are available to satisfy in full the consideration payable to Corus shareholders," the joint statement said. The Tatas - the largest private conglomerate in India that with 96 companies in its fold - had revised their offer after CSN was planning to make an offer for Corus shares at around 475 pence each. The deal - which surpasses the net foreign direct investment inflows into India last fiscal of some $7 billion - would more than quadruple their sales to $23 billion. The Anglo-Dutch company is currently ranked the ninth largest steel producer in the world with 18.2 million tonnes, while Tata is ranked 56th with five million. The acquisition is seen as taking their rankings several notches up to sixth. The top two slots in the global steel space are currently held by Indian-owned entities - Mittal Steel and Arcelor, both of which are in the stable of London-based Lakshmi Niwas Mittal.
Source: IANS
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