Is it worth for TATA to take the Corus deal?

D

deepakraam

Deepak Narayanan
Things turned topsy-turvy after TATA bidded for Corus.Tata had planned to take-over Corus by offering 455 pence/share.But CSN threw the hat in the ring by quoting 475/share.The race started there.Currently the CSN has quoted 600/share to buy Corus and they are also ready to pay 700/share.Though TATA's have big pocket is it worthy to pursue the deal?The Tata steel shares and CSN shares dropped by a good margin in their respective stock exchanges.Corus shares are doing good.

So at this juncture,is it a good option for TATA to quote more to win Corus deal?


-Deepak
 
Quoting more for corus will mean further devaluation of stock of TATA's .

I think they should retreat.
 
Rather than looking @ their share price, Tata will need to look @ what price does Corus become a liablity to them. Share price is not d best indicator of this. It will finally depend on full analysis of the synergies that Corus will get them. They will also need to look @ the future scenario of the steel industry and then take a sound decision..
 
Hi,
I agree that only the share prices won't give you the full picture.Delving further more some of the points that came to mind on this deal:

1.The bidders are going to pay 3.5-4 times the market value of Corus which will make it a bigger deal than Mittal-Arcelor.

2.CSN has more steel reserves than TATA which would make Corus to go with CSN.

3.Recovering the debt after this deal would be a big task.

So I guess it is better for TATA to quit the deal.


There is also another good option available.

As the saying goes "If you cannot beat them ,join them".

How abt TATA and CSN merging with Corus which will be a win-win for all the three involved
 
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