CSN outbids Tata to buyout Corus
Brazil’s Companhia Siderurgica Nacional (CSN) on Friday announced that it is making a counter bid for acquisition of Anglo-Dutch rival Corus, valuing the latter at $8.2bn.
In a statement to the London Stock Exchange, the Brazilian company said its offer of 475 pence ($9) per share is about 4.5 per cent more than the Indian steel producer Tata’s last month bid worth 455 pence ($8.62) per share.
Corus, formed from the merger of Dutch firm Hoogovens with British Steel Plc in 1999, yesterday also acknowledged a counter takeover proposal by the Brazilian company CSN. However, it declined to comment further.
"Corus notes the recent announcement by CSN and confirms that it has this afternoon received approach by CSN," a Corus spokesperson said in a brief statement. "A further announcement by Corus will be made in due course," the spokesperson said.
Headquartered in London, United Kingdom, Corus board had accepted the Indian steel firm Tata’s bid on October 20. However, the bid still requires approval of Corus shareholders.
Tata, who has agreed to a 1% breakup fee if Corus goes for a rival bid, still reserves the right to bid higher.
Meanwhile, CSN chairman and chief executive Benjamin Steinbruch in the ststement said, "A combination of CSN and Corus would create a global powerhouse with market leading positions and exceptional distribution networks across both developed and emerging markets."
If the deal goes in favour of CSN, then the merged CSN/Corus firm would become one of the world’s top five steelmakers, producing 24 million tons of annual steel and nearly 50 million tons of iron ore output annually, by 2010.
Tata’s bid and CSN’s counter bid for Corus acquisition, which are considered as a part of a merger spree apparent in steel industry, follow Mittal Steel's $32 billion takeover of rival Arcelor this summer.
CSN, which is one of the largest steel firms in Latin America, employs 8,000 people with overseas operations in the US and Portugal, while Corus has 47,300 employees worldwide, including 24,000 in the UK at production facilities at Port Talbot, Scunthorpe and Rotherham.
Corus shares were up 22.50 pence (4.76%), to 495.50 pence ($9.39), at the close of trading in London Stock Exchange yesterday, indicating investors still expect a higher offer from Tata or perhaps Russian steel firm, Severstal.
Today, the Corus share price surpassed the bidding prices, jumping 4.9 per cent to 496-1/4 pence, while the Tata Steel stock ended 1.2 percent lower at Rs. 475.95 on the Bombay Stock Exchange (BSE).
