Deadline likely for Corus bids

By siliconindia   |   Tuesday, 19 December 2006, 06:00 Hrs
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New Delhi:The end to the tough fight for gaining control over Corus finally seems to be in sight. The takeover panel of the UK is likely to set a deadline for both bidders - Tatas and CSN - to make their final offers and end the uncertainty looming over Corus' future. After CSN’s 515-pence a share bid, and the indefinite postponement of its shareholder meeting by the Corus board, there has been no move from either side to seal the deal. The panel, once it sets a deadline, can ask the bidders to put up or be left out, reported The Economic Times today. The spokesperson for UK's Takeover Panel clarified to ET that in the case of two bidders, both under the scheme of arrangement, the panel could seek to apply an accelerated timeframe to achieve closure. The report suggested that the takeover panel may even look at a two-way auction in which case the terms and conditions under which both CSN and Tata making offers would be announced in due course. This is often done to stop a target company from being subjected to a long-drawn siege, to the disadvantage of its business and shareholders. All sides seemed to welcome the impending development. While CSN's spokesperson said that the company would welcome any move to speed up the process, sources close to Corus said that any move to achieve some closure would be welcome. But none of the three parties—the Tatas, CSN or Corus—were ready to comment on the stance they would be taking. As per the regulation present in the UK takeover code, takeover offers are valid for 60 days. In case there is competition, bidders can revise their offers till 14 days before the end of the stipulated period. The competitor, in this case CSN, sets the timetable. With respect to the goings-on in the Corus takeover sags, the key dates are 12 th of January and 13 th of January respectively for Tatas and CSN, till when they can revise bids. However, the two competitors can, in consultation with the Takeover panel, set an extended deadline, subject to all concerned parties’ agreement.. However, in the case of Corus, as both the competing bids are through a scheme of arrangement, where the time-table is set by the court, the takeover panel said that "we will have to decide on what Day 46 is, in consultation with all parties." In this scheme, the Court sets the timetable for completion and implementation, noted ET. The Corus situation is poised at an interesting juncture: Its board has recommended CSN’s bid-yet the highest, to its shareholders. However, since the Tatas have not withdrawn, or made a revised offer, Corus is faced with two competing bids under the scheme of arrangement. As to what will happen next, under a scheme of arrangement only one bid can go before the court. An auction alternatively is another method for ensuring that both bidders can stay in the race. Once the final date has been set, agreed to by all parties, it can be accompanies by a two-way auction. In consultation with the parties, the takeover panel will set out a framework for the functioning of the auction. The winner of the auction can then proceed with the takeover either under the conventional scheme, or under a scheme of arrangement.

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