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UK panel starts talks with Tata, CSN
BS Reporters in Kolkata/Mumbai | January 24, 2007 11:20 IST
Last Updated: January 24, 2007 11:26 IST
The UK Takeover Panel has initiated discussions with the two suitors for Anglo-Dutch steelmaker Corus Group -- Tata Steel and CSN of Brazil -- to lay down the process for selecting the winner.
With the January 30 deadline approaching, the panel is trying to determine the method to be adopted for selecting the winner, if a competitive scenario continues to persist. A agency report said the panel could announce the winner as soon as in a day or two.
Takeover Panel officials were not available for comment. However, sources close to the development said the panel was in discussions with the parties involved and an announcement was expected later this week.
The consultations with the suitors and the target company Corus entailed clarifications on the process, which the panel proposed to manage in the event of an auction.
On December 19, the Takeover Panel ruled that the last date for Tata Steel and CSN to announce the revised offers for Corus would be January 30 this year.
If a competitive situation continues to exist shortly before January 30, the panel executive may require any revised offer to be published in accordance with an auction procedure, the terms of which will be made by the panel executive.
At present, CSN's bid stands higher at 515 pence a share, which was recommended by the Corus board. Sources said the Corus board would have to act in the interest of its shareholders.
The market was expecting a revised offer from the Tatas any time. However, sources said the Tatas could wait for the Takeover Panel announcement before coming out with a revised offer. It would also be closer to the deadline.
Analysts said Tata Steel, which originally offered 455 pence before scaling up the offer to 500 pence, has tied up funds for increasing the offer to 535 pence.
The company might go to the level of 550 pence to acquire Corus. A 550 pence a share offer will cost Tata Steel around $10 billion. The company could go to this extent without stretching its balance sheet, they added.
With the bidding war drawing to a close, Corus shares rose to 547.50 pence, close to year's high of 550.50 pence.