Battle for Corus

vengabeats · Oct 6, 2006

Think of India, steel and consolidation and only one name springs to mind--that of metal maharajah Lakshmi Mittal.

Yet the Rajasthan-born, Kolkata-educated industrialist is missing from this plot. Tata Steel, part of the sprawling Tata conglomerate whose interests include cars, telecommunications, software consulting, hotels and consumer goods, said Thursday it was considering a bid for Anglo-Dutch rival Corus, illustrating the pressure the steel industry feels to consolidate.

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Tata stressed that a bid for Corus, which was formed in 1999 through the merger of British Steel and Hoogovens, was only one of the options it was considering and there was no certainty an approach would be forthcoming. Even so, investors loved it. The announcement sent shares at Corus up 12.52 per cent, to 458.5 pence ($8.61), in London.

When Tata's chairman, 68-year-old Ratan Tata, a Cornell-educated architect, succeeded his uncle J.R.D. Tata at the helm of the conglomerate 15 years ago, he set out to unite, refocus and modernise the company's 100 or so largely independent businesses. Aided by cash from its Tata Consultancy Services--the conglomerate's software unit--and the growth of India's economy, he has rebuilt the company's shareholdings in Tata Steel and increased its revenue sixfold.

Tata said a year ago that he was now looking at opportunities to invest in steel companies in developed countries, "but we are making sure that we have secure access to raw materials because I really believe that owners of iron ore are going to rule the industry. They will be the OPEC of the steel industry."

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Back in June this year, it seemed as though Mittal and two billionaire Russians would swallow up the steel industry. One was Kremlin-endorsed Muscovite Alexei Mordashov and the other was his baby-faced compatriot, Roman Abramovich, a London-dwelling soccer fan with a big, byzantine asset portfolio. First Luxembourg-based steelmaker Arcelor announced a deal to buy Mordashov's Severstal as it tried to fend off a hostile takeover bid from rival Mittal Steel. Then Abramovich was said to be in talks to buy Corus.

Neither came to fruition. On June 25, Mittal Steel decided to merge with Arcelor, with the new company to be called Arcelor Mittal. The merger has been successfully approved by shareholders and directors of Arcelor, making the company the largest steelmaker in the world. Abramovich never made a move for Corus.

Corus, which is much larger than its potential suitor and employs more than 40,000 people, declined comment Thursday.

Source : rediff

vengabeats · Oct 18, 2006

New Delhi: It's finally official. It could be India's biggest deal as the Tata's have bid to acquire 100 percent stake in UK based Corus Group for whopping $9 billion.
Tata Steel is offering an all cash deal for the acquisition.
Corus is in discussion with the Tata management and will be making further announcements in the near future.
Corus has confirmed Tata's proposal for a buyout amounting to 455 pence per share.
Corus said on Tuesday that it received a proposal from Tata Steel about a possible offer valuing the company at 455 pence a share ($8.45; 6.76).
''There can be no certainty that an offer will be made,'' both companies said.
Corus shares dipped 0.8 per cent to 475.50 pence ($8.83; 7.05) on the London Stock Exchange. Tata Steel share rose 0.85 per cent to Rs 515.70 ($11.2; 8.9) in trading on the Bombay Stock Exchange.
''We are looking for opportunities in all areas where we are present,'' said R Gopalakrishnan, executive director of Tata Sons – the holding company of the group that has interests spanning everything from steel and automobiles to software services and hotels with annual sales totaling $23 billion.
Tata Steel has little presence in Europe, and Corus previously said it would make sense for the company to team up with a low-cost partner with assets in countries such as Brazil, India and Russia.

Source : IBNLIVE

nick18_in · Oct 24, 2006

BATTLE FOR CORUS

Corus Group Takeover In London
When I read the news of ninth ranked Corus take over by 56th ranked Tata Steel, first thing that struck me was that majority of the business for the merged company shall be from Europe and this new entity may be required to pay most of the taxes in Europe.

On searching the sites and studying the Corus press release many startling information was uncovered not disclosed by our press.

[The Acquisition will be made by Tata Steel UK, a wholly-owned indirect subsidiary of Tata Steel, and will be implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985.]

1. Wholly owned Tata Steel UK would buy Corus Group, not Tata India. So it is not an Indian take over but a British company taking over another British company. Money will be pumped into TS UK from India and it shall pay all taxes in UK.

2. Takeover process in unfinished. Shareholders of Corus Group have raised objections and may like more money than presently agreed.

3. Tata Steel UK subscribing to UK laws means foreign nationals will acquire shares in it son hold majority or near majority.

>> This is just one illustration of why I rate Manmohan Singh as Quack. I repeatedly opposed the India takeover code in 1995-6 formulated by Bhagwati Committee.

India allowed only 1% acquisition of shares by NRIs in a year and collectively all NRIs could take 5% share in an Indian company. In just one transaction $8billion is pumped in to UK economy.

Manmohan Singh and ABV governments made takeovers very difficult for NRIs and foreign companies. Thus India has lost opportunities to invest bulk infusion of capital and technologies over 15 years in India.

Wouldn¢t it been better if Corus Group invested $4b Indian to take over Tata Steel in India and pay all taxes also?

As GOI he ought to have preferred inflows of capital and with it technology and marketing resources. Take over Reliance Petroleum or even Maruti would have inducted well over $100b to $200b in to Indian economy over 15 years accelerating development, boosting exports, creating jobs and generating taxes to the government.

Manmohan Singh Government is not governing India but is governed by Ambani¢s and Tatas.

[The Acquisition will be made by Tata Steel UK, a wholly-owned indirect subsidiary of Tata Steel, and will be implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985.]

http://www.corusgro up.com/file_ source/staticfil es/functions/ financial/ 20061020PressRel ease.pdf

14. Financing

[The Acquisition will be funded by a cash contribution by Tata Steel to Tata Steel UK to the extent of £1,836 million. In addition, Standard Chartered Bank has provided subordinated debt financing to the extent of £196 million to Tata Steel UK. To finance the balance of the consideration due under the Acquisition, Tata Steel UK has in place senior, mezzanine bridge and working capital loan facilities of a total aggregate amount of £3,300 million (comprising senior term loan facilities of £1,600 million, a £350 million senior revolving credit facility and a £1,350 million mezzanine bridging loan facility), which have been jointly arranged and fully underwritten by Credit Suisse, ABN AMRO and Deutsche Bank. These debt facilities will also be used to refinance the majority of the existing debt of the Corus Group (including, it is currently anticipated, the existing public debt), provide working capital for the Corus Group after completion of the Acquisition and pay certain fees and expenses associated with the Acquisition.

ABN AMRO and Deutsche Bank, as joint financial advisers to Tata Steel and Tata Steel UK, are satisfied that sufficient resources are available to satisfy in full the consideration payable to Corus Shareholders under the terms of the Scheme. Further information on the financing of the Proposals will be set out in the Scheme Document.

Under the agreement for the provision of the debt facilities, Tata Steel UK has agreed, save as may be required by the Panel or the Court, not to waive, amend, withdraw or agree not to enforce any material term or condition of the Scheme in any material respect without the prior consent of the agent for each debt facility agreement.]

[The Scheme will be governed by English law. The Scheme will be subject to the applicable requirements of the Takeover Code, the Takeover Panel, the London Stock Exchange, the UK Listing Authority and the Amsterdam Stock Exchange.]

Prof R K Gupta

Courtesy R Singh

love_gundu22 · Dec 14, 2006

BATTLE FOR CORUS

Rising bids raise fear of Winner`s Curse
The rising heat in the race between Tata Steel and Brazil's CSN to acquire Anglo-Dutch steelmaker Corus has raised the spectre of the Winner's Curse, the financial theory that the winning participant in a frenzied auction will typically pay an overvalued price.

An analyst said CSN offer of 515 pence a share pegged the enterprise value of Corus at $11.6 billion, 7.6 times its 2006 earnings before interest, tax, depreciation and amortisation. Mittal Steel paid about six times the operating profit to acquire Arcelor.

"Tata Steel may not outbid/match CSN as it will stretch their balance sheet considerably and it might take a lot of time before synergies between Tata Steel and Corus materialize," says a report by Emkay Research.

As the two bidders appear to be betting on the rising curve of the commodity cycle, the critical question is: what is the right price for Corus?

On October 20, when Tatas made their firm bid in London, the Corus management had called it the "the right offer from the right partner".

However, following CSN firm bid of 515 pence a share, the Corus management changed its tenor and put its might behind CSN. In the process, the valuation of Corus vaulted from $8.04 billion to $9.6 billion in the course of just three bids.

Hitesh Agrawal of Mumbai-based Angel Broking says any price above 525 pence a share would affect the balance sheet of Tata Steel in the short term.

In this open ascending auction, Tata could have kept making bids, one just a little higher than the other, till the value it attached to Corus was arrived at.

Instead, the Tata brass tried to pre-empt CSN by offering 50 pence per share — nearly 10 per cent — more than its first bid of 455 pence a share. Tata Steel must have been hoping that this would be the knock-out punch.

However, CSN, which appears desperate for Corus, having lost in the race for US-based Wheeling-Pittsburgh Corp, turned the tables by pricing its first firm bid at 515 pence a share.

Interestingly, CSN holds 3.8 per cent equity of Corus, that is, 33,856,936 shares. Every increase of 50 pence a share will fetch the Brazilian company an additional £17 million. Significantly, the Tata Steel stock has fallen 13 per cent since October 20, when unveiled its bid for Corus.

An analyst with a foreign brokerage, who did not wish to be named, said there was no dearth of good steel companies available for acquisition in Europe.

"Desperate to get Corus under his clutch, the CSN chairman looks like sweetening his bid if Tata Steel launches a revised offer,"

love_gundu22 · Dec 17, 2006

The battle for Corus

It is anybody's guess how far and how long the bidding war will continue. But research reports indicate that any price beyond 525 pence per share may take the entire deal into dangerous "winner's curse" territory, with the winning bidder paying too high a price.

Will the bidding war between India 's Tata Steel and Brazil's CSN aimed at controlling Anglo-Dutch steel-maker Corus escalate in the coming weeks? CSN has trumped Tata Steel's 500 pence per share offer with a 515-pence offer, throwing the ball back into the Tata court. Asked to comment on the battle, Lord Swraj Paul, founder of Caparo Steel, told a newspaper from London: "Now, it's purely a price issue. Management has no say in such matters. In this case, the shareholder who is selling wants more money." And, as things stand today, it is anybody's guess how far and how long this bidding war will continue.

However, any lay observer of this battle may well wonder why two emerging market steel players are locked in such a bruising battle and why Corus is such a prize catch for them to be willing to pay such a heavy price. There appear to be four elements that have made this pursuit of Corus inevitable:

It will transform the winner into one of the top five global producers with a combined capacity of about 24 million tonnes (see Box);

It will offer access to the European market. Europe and the US are the high-growth steel markets ripe for consolidation. For instance, in Europe, of the top five steel-makers after the Arcelor-Mittal combination, Corus, with its scale and distribution gateway, offers the best opportunity for entry. Other players, such as Riva or ThyssenKrupp, may not be open to consolidation at this point.

The US and Europe are expected to be heavy users of steel, at least over the next five years, Asian markets, where the demand remains strong, will take a while to catch up with European markets. The demand potential in the growth markets in the intermediate period hold out a lucrative opportunity for steel-makers from the BRIC countries.

Tata Steel's push for Corus

The acquisition of Corus is likely to confer three principal benefits on Tata Steel: Larger scale, strong downstream business operations, and scope for cross-fertilisation of R&D capabilities (through value-added products in packaging, auto and construction).

Access to European markets, however, remains the larger attraction. Corus, which controls about 50 per cent of the UK steel market (in volume terms), is likely to offer Tata Steel a direct gateway into the European markets, where it does not have a presence now.

The move also fits well with its de-integration strategy (making primary metal in low-cost countries and having finishing facilities in end-user markets). Its earlier two acquisitions, of NatSteel and Millennium Steel, were also carried out with a similar intent.

For Corus, the high operating cost has been the principal factor affecting its profitability. This, perhaps, explains the reason for its low EBITDA (earnings before interest, taxes, depreciation and amortisation) margin at about 8 per cent vis-à-vis 14 per cent for its European peers. This is in stark contrast to Tata Steel's margins of over 30 per cent and its low-cost manufacturing base.

CSN's chase for Corus

From a strategic perspective, CSN's bid for Corus enjoys the following key advantages:

Offers access to iron ore: For Corus, which sources a substantial portion of its iron ore requirements, its key raw material (estimated at 20-25 million tonnes) from third-party sources, CSN can immediately supply high-quality and low-cost iron ore from the Casa de Pedra mine in Brazil, one of the largest captive iron-ore projects worldwide, owned by CSN. Since this iron ore will be utilised in Corus' upstream operations in the UK and the Netherlands, CSN claims it will lead to "incremental annual cash-flow in Corus of approximately $450 million (pre-tax) by 2009," apart from providing a good hedge against input price volatility.

Scope for slab production: The slab market is said to be notoriously fickle, largely on account on its small scale relative to finished steel. If CSN can establish a regular supply flow of slabs to Corus, it will be able to consider expansion projects for slabs that it has put on the backburner.

Both Brazilian and Indian steel-makers enjoy over 20 per cent cost advantage in slab-making over their European counterparts.

According to the information document submitted by CSN, "... (it) is one of the lowest-cost steel producers in the world and has announced plans for a greenfield slab project at Itaguai (in Brazil) to expand production by 4.5 million tonnes annually by 2011. Over time, Corus would gain a sustainable cost advantage from increased supply of low-cost intermediate steel products."

Shift from high- to low-cost regions: In certain product categories, Brazil enjoys a huge cost advantage over some of the European producers such as Corus, especially where the company carries high legacy costs as in the case of Corus' plants at Port Talbot or Scunthorpe in the UK. Moreover, Teesside also has a high-cost slab facility in the UK, which can also be shifted once the combination stabilises.

Considering the high cost structure of Corus (despite its restructuring programme of the past few years), its EBITDA per tonne is considerably lower than global average. Hence, the scope for moving production to low-cost regions will be a compelling proposition in the medium term.

Anyway, this will only complement the immediate advantage of CSN cross-selling to Corus' customer base, improving its product mix and using the Corus distribution gateway into Europe.

Financing structure and valuation

Though both CSN and Tata Steel have gone for a leveraged buy-out route to bid for Corus, Tata Steel appears better placed in terms of servicing the debt.

The combined leverage of CSN and Corus will be three times its EBITDA, which may be pegged higher if the bidding war continues. This is likely to expose CSN to debt servicing risks, if it fails to generate the kind of cash flows through cost synergies and by closing down and moving the high-cost mills in the UK to low-cost locations in the medium term. It does not have the kind of backing of a cash-rich group such as the Tatas to tide over a difficult situation.

Importantly, all the debt contracted by Tata Steel is without recourse, unlike for CSN, where parts of its credit facilities are with recourse. This offers greater protection to the former's balance-sheet.

Tata Steel's revised offer, at 500 pence per share, values Corus at about eight times its EBITDA, which appears stiff, compared to the multiple of 5.4 times that Mittal Steel paid to buy out Arcelor. CSN's bid valuation is obviously higher, at 515 pence per share. While valuation does hold significance, it is the desire to gain pricing power and calibrate supply to global demand that appears to be the key driver in the battle for Corus.

Endgame for Corus

On balance, CSN's bid for Corus appears stronger on operational rationale, while the Tatas' is stronger on financing structure.

As mentioned earlier, it is anybody's guess how far and how long this bidding war will continue. But research reports are veering around to the view that any price beyond 525 pence per share may take the entire deal into the dangerous "winner's curse" territory (with the winning bidder paying an overvalued price).

However, unlike 2002, when an attempted merger between CSN and Corus failed on uncertainties in the global business environment, this time around, a call on the steel cycle will play a crucial role in this bidding war.

Steel prices are expected to remain at higher levels on an average, driven by strong demand, particularly in the emerging markets, led by China.

With consolidation set to gather momentum and greenfield capacity additions unlikely to be commissioned before 2010, the bargaining power is expected to switch back to steel-makers from suppliers, lending a firm outlook to pricing.

Finally, there is also some speculation whether a three-way merger between Corus, Tata Steel and CSN may be a good choice. For instance, Arcelor was created through a merger of French, Spain and Luxembourg steel producers, in the first wave of regional steel consolidation in 2001.

As the steel sector enters a global consolidation wave, such a three-way merger may not be such an outlandish proposition.

Though this is still in the realms of speculation, considering the immediate synergies offered by CSN and the long-term benefits and financial strength from the Tatas, it may well turn out to be a desirable idea.
:tea:

love_gundu22 · Dec 17, 2006

War for Corus: Beat them or join them

War for Corus: Beat them or join them

Sanjay Suri
CNN-IBN

London: The battle for Anglo-Dutch steel giant Corus continues but can the Tata Steel and CSN afford to escalate the bidding war? Analysts now say that the best way is ‘If you can’t beat them join them’.

With the bidding war for Corus between Tata Steel and CSN set to escalate further, analysts are now proposing a new strategy. They say a three-way merger between the companies might make them a much more formidable rival to Arcelor Mittal.

Steel Business Briefing Managing Director Patrick Flockhart said: “I think a threesome would make quite good sense, i.e. a threesome between CSN, Tata and Corus. Both CSN and Tata are both of a similar size, they are both good quality producers and low cost in developing countries, and therefore if they were to combine together and with Corus, that would make a force that would be quite strong."

But of course the question arises whether such a merger is at all possible.

Caparo Group Chairman Lord Swraj Paul said: "It's both desirable and possible. It's really a question, look at the strength of all three companies, and consolidation is still going on, Mittal did that, and still with all these three consolidations, they will still be much smaller than Mittal, so it is certainly desirable but it's really a question for all those interested parties to decide whether it can be done."

But analysts say that what, stands in the way of a three-way merger is less than steel – or more, depending on how you look at it.

"The only thing that comes in the way is personalities and ambitions. You know would Tata agree to merge with CSN and of course would CSN agree to merge with Tata. CSN is led by a very ambitious gentleman, would he consider a situation where he might not be the lead player in a new company. May be not. But certainly it would seem to me to be worth considering," Flockhart added.

What if the bride were to go for both suitors. Threesomes are not uncommon in the world of steel. Arcelor and then Mittal came along. This kind of union could be desirable – but it's not going to be easy.

love_gundu22 · Dec 19, 2006

Corus sets deadline for Tata, CSN

Corus sets deadline for Tata, CSN

BID WAR: Executive panel of Corus has set the last date for Tata and CSN to announce revised offers.

New Delhi: The executive panel of Corus has ruled that the last date for Tata and Companhia Siderurgica Nacional (CSN) to announce revised offers for Corus shall be 30 January 2007.

Citing relevant rules, the Panel said in an announcement on London Stock Exchange if a competitive situation continues to exist till shortly before January 30, an auction procedure would be implemented.

If a competitive situation continues to exist shortly before that date, then auction rules will be followed to determine the winner.

The authorities swung into action after a near two-month long saga for Corus, for which Tatas made a revised bid of $9.1 billion that was countered by CSN, which announced an agreed $9.6 billion bid for Corus, worth 515 pence per share last week.

While CSN had made its information document on the counter offer public last Friday by submitting it to Corus shareholders, Tatas had availed of the 46 days period for technical evaluation of rival's bid and taking a decision.

Corus reiterated in a separate statement on Tuesday that it planned to adjourn an extraordinary general meeting scheduled for Wednesday.

A takeover of Corus by either CSN or Tata Steel would create the world's fifth-biggest steelmaker, with annual production of around 24 million tonnes of steel.

At present Arcelor Mittal is the world's biggest steelmaker, which was formed after Mittal Steel bought Luxembourg-based Arcelor earlier this year.

:SugarwareZ-299:

love_gundu22 · Dec 25, 2006

For India, Inc., it's no party tonite

NEW DELHI/MUMBAI: When Santa comes calling this Christmas season, he will find Corporate India’s living room empty. Instead, corner rooms will take centre stage as Mukesh Ambani, Anil Ambani, Sunil Mittal, Ratan Tata, Ravi Ruia, Prashant Ruia and their top teams give cruises and safaris a miss for setting the agenda for 2007 and beyond.

This is Corporate India’s busiest Christmas. The next one month or so is crucial for all of them because how they strategise during this period could decide lndia Inc’s new order.

While the Tatas have Corus to think about this Xmas, Anil Ambani, Sunil Mittal and the Ruias are closely following the moves of Hutch’s majority owner Li Ka-shing, who has put his 67% stake on the block. Mukesh Ambani is worried about something else. Thanks to Wal-Mart’s sudden entry, he has put his retail plans on a fast-forward mode and as such is not taking an annual holiday. Says CII chief mentor Tarun Das: “Traditionally, this was the time when everybody went for year-end holidays with their families. The industry could afford the luxury then. However, in today’s world, there is no holiday.”

Take the Tata Group for instance. Sources say that the Tata Steel’s major executives are known to sign-in even on public holidays like May 1 or during the festivals. “The only time they take off is during the year-end, including Group head Ratan Tata. This year though, everyone is in the office,” they said. The company spokesperson, however, added that there has been no change in anybody’s schedule and things are normal.

People in the know said that managing director B Muthuraman had taken a few days off, but only “for his son’s marriage”, and is back in his office in Jamshedhpur. Sources added that T Mukherjee, deputy managing director, will be away till December 27. “Other top officials are in town,” said sources.
“Never has India Inc thrown up so many balls in the air. It has been caught in such a high-decibel M&A battle, and pitted against such formidable rivals, that speed is of the essence,” says an industry expert.

For instance, faced with a strong rival in Bharti-Wal-Mart, Ambani Sr is believed to have asked his top team in Reliance Retail to step on the gas like never before. He is busy meeting the chief executives of each vertical once a week (earlier he used to meet them once a month) forcing most to curtail their holiday plans. At the most, some of them will take three-four days off, but they are not allowed to remain incommunicado. So forget holidays in places where mobiles don’t work.

This is because the roll-out plans for grocery stores and supermarkets have been brought forward. For example, the Delhi launch is slated for January instead of March-April. Reliance knew that Wal-Mart would come to India soon, but it never thought it would be so soon, said a company insider.
Sunil Mittal and his top executives, Akhil Gupta and Manoj Kohli, are likely to work into the new year. They too can’t afford to take holidays, as Vodafone has now emerged as a strong contender for acquiring Hutchison Essar. The trouble here is that Vodafone holds a 10% stake in Bharti Airtel.

The Mittals are left with two choices. Either join hands with Vodafone to make a bid for Hutch or extract a fee from Vodafone for waiving the non-compete clause it had signed with the UK company. Better still, buy back Vodafone’s stake in Bharti at a discounted price and make a quick buck there. Whatever route the Mittals take ultimately, it’s exciting and gruelling for them. Bharti can expect troubled times if Reliance Communications, with the help of private equity funds, succeeds in taking over Hutch. That will make Anil Ambani the biggest telecom company by far with strong presence in CDMA and GSM.

In the end, it is all about scale. So if the Tatas are burning the midnight oil to outbid Brazil’s CSN to acquire Britain’s Corus, it is largely to catapult itself as the fifth-largest steel company in the world. With the UK takeover panel fixing January 30 as the deadline for Tata Steel and Brazil’s CSN to make revised offers for Anglo-Dutch steel maker Corus, it’s a busy year-end for Ratan Tata and his executives.

A senior partner of law firm FoxMandal Little said unlike in the past, the US and Europe are not shut down completely. “There is somebody or other to keep up the pace of the proposed deal or transaction,” he said. For many, bonuses are calculated based on the December-end figures. According to sources, even if the deal closed this year and fees came in next year, it will have a positive impact on the bonuses for 2007. Also, most of them will want to finish off their deals, rather than leave them hanging, for the fear of some going sour, amid increased competition.

:tea:

vengabeats · Dec 28, 2006

MUMBAI: Tata group chairman Ratan Tata says “there is a limit” to what one might consider the “enterprise value” of Corus Group, now in the midst of a takeover tussle between the Tatas and Brazil’s CSN.

In an interview with NDTV 24x7, which will be telecast on Saturday night, Tata made it clear that the the group could only set a price level that made “strategic sense and doesn’t endanger or jeopardise the strength and health of our own shareholders.”

On how far he was willing to go to ensure that the takeover was successful, Tata made it clear that, “it’s not an ego issue, and it’s not an issue of winning. It’s not an issue of being the fifth largest steel company either…What drove me and Tata Steel to look at the acquisition was that strategically, and in terms of synergy, we had an opportunity unequalled.”

What this means, analysts said, is that the Tatas have indeed worked out a fresh price for Corus that could be in the range of 530 pence per share (against CSN’s standing bid of 515 pence).

On other issues, Tata said his group would not pull out of the Singur project, despite the growing political controversy. He agreed that the proposed Tata Motors project had got caught up in “a political quagmire.”

He blamed his competitors for some of that, but did not name them. “Let me just say, this is not just political. I happen to know that some of our competitors are also fuelling some of this fire and would be very happy if the project got delayed.” Tata said.

Source : DNA

vengabeats · Dec 30, 2006

Guillotine bid may decide Corus winner

Anyone can put in bids till Jan 30, but neither bidder wants to show his hand in advance

If all appears quiet on the Corus Group takeover front, don’t believe it. The New Year will see both the Tatas and Brazil’s CSN playing the cat-and-mouse game, trying to figure out how high the other will bid before taking a final view on topping that or pulling out.

The offer that currently stands is CSN’s 515 pence a share, but experts predict a final bid in the range of 540-550 by either of the two parties.

The UK Takeover Panel, an autonomous body which regulates acquisitions, has set January 30 as the deadline to end the uncertainty over the future of Corus. Seasoned observers believe the real action will come more towards the latter half of the month. Reason: the earlier the oneupmanship begins, the greater the danger that the bidding war may continue to unreasonable levels, to the detriment of both parties.

As Ratan Tata said the other day in a TV interview, the Tatas will bid only upto the level where it makes “strategic sense”, and not for the sake of ego. CSN, which has more debt on its balance-sheet than Tata Steel, has even more reason to be circumspect about pushing the price up needlessly. In this scenario, both parties may be happier to let the game go into extra time, where a penalty shootout decides the winner quickly and painlessly.

“The Takeover Panel has not imposed a guillotine bid situation as yet. Until January 30, the rival companies can make as many bids as they want. But if by the cutoff date the deal has not been finalised, then the panel can, and may, ask the contenders to send in a single final bid, perhaps in a sealed envelope, which would be then be put to the shareholders to bring an end to the issue,” says Vinod Joseph, solicitor with London-based Richards Butler LLP.

According to Joseph, “the cutoff date imposed by the Takeover Panel is in accordance with Principle Six of the Takeover Code which states that if a takeover war is taking longer than a reasonable period of time, then a time-limit can be imposed so as to allow the offeree company to carry on with its normal business of making money for its shareholders, in this case to allow Corus to make steel.”

In a dramatic 24 hours on December 10-11, CSN had outbid Tata Steel’s offer of £4.7 billion for Corus, pushing it up to £4.9 billion, which is where it stands now. Each bid is valid for a period of 60 days.

“The Takeover Panel is simply trying to regulate the situation and tell bidders that there should not be a long-drawn, protracted bidding war, and ensure that a fair deal emerges,” adds Joseph. Given the shared worries about overbidding, both Tata Steel and CSN may be happy to send in their final bids for a knockout decision in a sealed envelope. The agony will then end quickly for both of them, with the Corus board marking a final recommendation and shareholders taking the final call.

Source : DNA

vengabeats · Jan 4, 2007

Tata far from folding, but CSN certain to outbid: reports

LONDON: As the deadline in the bidding war for Anglo-Dutch steelmaker Corus draws near, the guessing game is gathering steam on which of the two suitors - India's Tata Steel and Brazil's CSN - would walk away with the prized deal.

While speculation continues about Tata Steel set to hike its bid by another 10 per cent to as high as 550 pence a share, reports are also flowing in about Brazilian rival being determined to outbid whatever new offer comes for Corus.

British newspaper The Independent's business editor Jeremy Warner today wrote in a column that Ratan Tata might already have a number in his mind which is the maximum he and his advisers think Corus is worth to Tata Steel.
But, even if that number is 550 pence, it does not mean he will offer it, as he "is only too well aware, whatever he does the Brazilians are almost certain to outbid him."

CSN Chairman Benjamin Steinbruch is determined to have Corus, almost regardless of the price, the report said.

The Independent article follows another piece by Business Week magazine's Asia Regional Editor Brian Bremner who wrote on Wednesday that Tatas are far from folding in Corus and the "cash-rich Indian steelmaker will likely up the ante against rival CSN to buy the Anglo-Dutch company."

The Business Week article said that the bidding battle for Corus was expected to go high-stakes in the coming weeks, when Tata Steel was likely to raise its bid once again to outmaneuver its Brazilian rival.

Tata Steel and CSN have earlier bid 500 pence and 515 pence a share respectively. The two companies must submit revised offers, if any, by January 30 after which the UK Takeover panel may initiate an auction to decide on who will acquire Corus.

Source : Rediff

vengabeats · Jan 7, 2007

'Tata-Corus deal could boost Indo-British ties'

NEW DELHI: In a boost to Tatas' bid for Corus, an influential UK lawmaker of Indian origin on Sunday asked shareholders of the Anglo-Dutch steel maker to keep in mind the reputation of Tatas before voting on any rival offer.

"The Tatas have a reputation going back 100 years... not only in India but outside. Their track record in terms of Tetley too is incredibly high," Lord Karan Bilimoria, Co-Chairman of the Indo-British Partnership, told reporters here.

Hoping that Tata succeeds in acquiring Corus, he said if the deal went through, it would be a "huge marker... milestone" in the Indo-UK ties.

Tata and rival bidder CSN have time until January 30 to revise their bids, failing which the UK Takeover Panel would decide the winner through an auction.

Ultimately, the shareholders are going to vote based on what benefits they get. Yet, they should not forget that a deal with Tata would ensure that they are "teaming up with a world-class company," he said.

On Tata Sons Chairman Ratan Tata's comments that the bidding war for Corus was "unfortunate", Bilimoria said it was expected and even Tata must have been warned by his advisors.

In such a deal, its common for rival bids to come up in the last minute, he added.

CSN had submitted a counter bid for Corus in November, after Corus recommended Tatas' offer to its shareholders in October. Since, the two have revised their bids with Tata offering 4.7 billion pounds and CSN 4.9 billion pounds.

However, Bilimoria said in the event of Tata missing out, there would be more opportunities for Indian companies going ahead.

Source : DNA

love_gundu22 · Jan 19, 2007

Corus shares rise on hopes Tata Steel will up bid

Corus shares rise on hopes Tata Steel will up bid

MUMBAI/LONDON (Reuters) - Corus shares rose to a seven-year high in early Friday trading on a report that India's Tata Steel could pay up to 5.7 billion pounds in a bid battle for the Anglo-Dutch steelmaker.

2007-01-19T095304Z_01_NOOTR_RTRIDSP_2_OUKBS-UK-TATA-CORUS-TAKEOVER.jpg

(L to R) B Mutharaman, Managing Director of Tata Steel, Ratan Tata, Chairman of Tata Steel, James Leng, Chairman of Corus, and Philippe Varian, Chief Executive of Corus, shake hands during a photocall in central London, October 20, 2006. Corus shares rose to a seven-year high in early Friday trading on a report that India's Tata Steel could pay up to 5.7 billion pounds in a bid battle for the Anglo-Dutch steelmaker. REUTERS/Toby Melville

A spokesman for India's biggest private steelmaker said, however, the report in the Economic Times newspaper was "baseless."

The paper, citing "people in the know", said Tata was likely to first increase its offer to 530 pence per share, topping a rival bid from Brazil's Companhia Siderurgica Nacional (CSN) of 515 pence a share, and then study CSN's response.

The Tata Steel board could empower management to offer up to 600 pence a share, the paper said.
The Tata Steel spokesman said: "The information received is baseless and we would like to deny any such development."

Corus shares nevertheless climbed 2.4 percent to 550-1/2 pence in early trading, while Tata Steel shares were down 1.9 percent at 466.6 rupees on fears it might overpay.

Analysts said Corus shares were looking expensive, but that higher bids could not be ruled out.

"Where we are now is a very high level ... But they are very cash rich companies, and anything can happen (in a bid battle), said Michael Tappeiner, a London-based analyst with West LB.

GLOBAL REACH
A takeover of Corus by either CSN or Tata Steel would create the world's fifth biggest steelmaker and would be the latest in the industry as companies look for global reach, economies of scale and to secure valuable raw material supplies.

Last year, Netherlands-based Mittal Steel bought Luxembourg's Arcelor to create Arcelor Mittal , the world's biggest steelmaker.

Analysts mostly think CSN holds the upper hand in the battle because it should be able to extract more cost savings from a deal. This is partly because the Brazilian firm will be able to export its iron ore supplies to Corus's business in Europe.

However, analysts also say that Tata Steel, which kick-started the battle with a 455p-a-share offer in October, should not be ruled out.

"Considering the interest Tata have shown (in Corus) from the beginning, such a move (a higher offer) can't be ruled out," said Hitesh Agrawal, an analyst with Mumbai-based Angel Broking.

"The acquisition may be negative in the short-term ... but both of them (Tata and CSN) have the ability to increase Corus's margins," he said.

Britain's takeover watchdog has set a January 30 deadline for Tata and CSN to make revised offers for Corus, which was formed from the 1999 merger of Dutch group Hoogovens and British Steel.

CSN is being advised by Lazard and Goldman Sachs , while JP Morgan Cazenove and HSBC <0005.HK> are acting for Corus. Tata Steel is being advised by ABN AMRO , Deutsche Bank and Rothschild .
BY Reuters

:tea:

ankitjain · Apr 6, 2007

my god... articles after articles to read on the same..

thanks.. heling me to know more on the same..

Battle for Corus

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Nilesh Nagdev

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Praveen Gurwani

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Nilesh Nagdev

vengabeats

Nilesh Nagdev

vengabeats

Nilesh Nagdev

vengabeats

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