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Home > Business > Business Headline > Report


Tatas to go into huddle over CSN's bid for Corus

Kausik Datta & Ishita Ayan Dutt in Mumbai | November 20, 2006 10:04 IST

The Tata Steel board will meet shortly to take stock of the situation arising out of Brazilian steel-maker Companhia Siderurgica Nacional's move to buy Anglo-Dutch steel company Corus Group with a counter bid higher than Tata Steel's offer.

CSN had approached the Corus board with an all-cash bid of 475 pence a share, subject to due diligence, on Friday.

Tata Steel announced on October 20 a bid of 455 pence a share to Corus shareholders, which was approved by the Corus board and will be placed before shareholders at an extraordinary general meeting on December 4.

Although sources in Bombay House, the headquarters of the Tata group, did not indicate any schedule for the Tata Steel board meeting, they said it would depend on the Corus board's response to the CSN bid.

Investment banking sources said Corus' response to the CSN move would be clear this week, which would witness a meeting of Corus' banking adviser Credit Suisse with CSN's lead adviser Lazard.

CSN chairman and chief executive Benjamin Steinbruch would also seek to meet this week Philippe Varin, Corus' chief executive.

Steinbruch had met Corus chairman Jim Leng in London on Friday to deliver his 475 pence a share cash bid. They added that the Corus board might also inform the Takeover Panel of London about its decision on the CSN move this week.

According to them, the Corus board would find it difficult to ignore the move, which is especially significant given CSN's position as one of the world's leading producers of iron ore, from its Casa de Pedre mines. CSN has said it will be producing 50 million tonne of ore annually by 2008.

The CSN move - its second in four years for Corus - is not a firm offer and is conditional on due diligence and financing. Due diligence, investment bankers said, could be completed within three weeks. After that, CSN would have to make a firm bid.

If Corus were to recommend and accept an offer from CSN, it will have to pay a �43-m break-up fee, which is worth 5 pence off the 475p offer.

Tata Steel, if it manages to take over Corus, will have a combined production capacity of 23.5 million tonne of steel, elevating it as the world's fifth largest steel company from its current ranking of 56th.


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Number of User Comments: 2




Sub: TATA - CSN

I think tata should not give up take over of Corus steel. Since Tata has first approached Corus for takeover, shareholders & management should support ...


Posted by krishna kumar





Sub: Tatas to go into huddle over CSN

world economies are all poised to slow down, which means less constructions, if Tatas are smart, they should not raise there bid. instead learn from ...


Posted by vijay




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