New Delhi: The Tatas are not yet ready to say ta-ta to Corus. A day after Brazilian steel giant CSN outbid it hours after Tata Steel had raised the offer, the Tatas are now mulling yet another counter-offer.
Tata Steel sprung a surprise on late Sunday when it raised its bid for Corus by a good 10 per cent over the initial offer. Tata's revised bid of 500 pence per Corus share was also 25 pence better than CSN's informal offer of 475 pence per share.
The Brazilian steel giant quickly outbid the Tatas with a formal offer of 515 pence per share later in the day. The CSN Group already owns 3.8 per cent stake in Corus.
However, Tatas had already secured Corus board's unanimous approval by moving in first. The Corus board has recommended Tata's offer to the stakeholders. And as things stand, CSN's offer will be discussed only after Tata Steel's offer is rejected by the shareholders. Tata Steel's valuation of Corus now stands at $9.16 billion.
A Corus spokesman said later on Monday that the board was recommending that shareholders now accept the CSN offer. The escalating bid battle sent Corus shares up 5.5% to 527.75 pence in morning trade
For the bid, the Tatas were to get additional financing from Stanchart and First Bank of Korea. Tata Steel has maintained the other terms of the bid, including the terms offered to the pension trustees. Tata Steel has also disclosed that its subsidiary has acquired 2125 shares of Corus, though these won't be included for voting on the EGM day.
So, the stage is set for another showdown and it appears that both the rival steel giants want to strike when the iron is hot.
While CSN seems to be in no mood to let go the deal that easily, Tatas have also braced themselves for a longer battle. Sources now say it is possible that Tata Steel will revise its bid by at least five to eight per cent in the aftermath of CSN's 515 pence per share offer if its offer is rejected by the shareholders. The sources say the Tatas could go as high as 525 pence or even a bit more.
While Tata Steel may not have said this in as many words, it has indicated that the battle was not over yet. “Tata Steel has noted the development and will consider its position," a Tata spokesman said on Monday.
Meanwhile, US antitrust authorities said on Monday that they have approved a proposal by Tata Steel to acquire Corus Group.
Officials have completed their investigation of Tata's offer without taking any action, the Federal Trade Commission said in a notice.
Tata’s previous bid was 455 pence/share
CSN’s informal bid was 475 pence /share
CSN’s actual bid is 515 pence/share
Tata’s revised bid has been unanimously recommended by Corus Board
CSN’s offer to be discussed subject to Tata’s bid being rejected
Tata now values Corus at $ 9.16 bn
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