The eight-hour bidding at the auction, overseen by the UK Takeover Panel, went to the ninth and final round. Finally, Tata’s 608 pence a share offer outsmarted CSN’s 603 pence proposal.
J J Irani, former Managing Director of Tata Steel who was present at the news conference today, said: ‘‘When I heard on a TV programme from London that the maximum bid can go as high as 610 pence for Corus, I knew we had won. I switched off the TV and went to sleep.’’ The The Tata threshold was much higher than the 608 pence per share which the company finally paid.
Tata dismissed suggestions that the group had overbid for the acquisition of Corus and said the company’s share prices, which fell by Rs 55 at 464.90, was a result of investors ‘‘taking both a short-term and a harsh view’’.
‘‘We often damn a company when it makes loss in a year... hopefully in future it (market) will look back and say it (acquisition) was a right move... Investors came in and increased the price. But we had to pay to get the company. We had taken a view that we would not go beyond a point. Had we reached that point, we would have walked away,’’ he said.
Muthuraman said Tata Steel would pay $4.1 billion for Corus and finance the balance by debt, but did not give details.
Corus, created from the 1999 merger of British Steel and Dutch group Hoogovens, will triple Tata Steel`s capacity to almost 28 million tonnes a year, from 8.7 million now, at half the cost of building new plants, Muthuraman said.
Reacting to the Corus deal, Sylvain Brunet, head of steel and mining at Exane BNP Paribas, said: ‘‘This creates an incentive for more consolidation in Asia (Japan, China) and in the United States.’’ He added that CSN was a likely predator after missing out on Corus. — (With Reuters)
The big deal, fine print
• The final cash offer of Tata Steel is 608 pence for each Corus share, 34% higher than its first offer in October and 5 pence more than the final offer from CSN.
• Tata offer values Corus at around nine times its earnings before interest, tax, depreciation and amortisation in the year to September 2006.
• Tata Steel will contribute $4.1 billion to the deal, with the balance to be raised through debt.
• The deal will treble Tata Steel’s capacity to almost 28 million tonnes a year from 8.7 million now at half the cost of building new plants.
• Ratan Tata will be chairman of the new board of Corus to be formed after the takeover.
• Tata Steel will not change any principal locations of Corus group’s business, and will continue to be headquartered in India. (Reuters)
