analists schatten de uiteindelijke reële overname prijs in op 525-600 pence....aan het eind van het overnamespelletje
Tata Steel's final offer for
Corus will be higher
Tuesday, October 17, 2006 23:16 IST
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Satish John, Sajeda Momin & Ajoy K Das
MUMBAI/LONDON/KOLKATA: It had to come. When Lakshmi Mittal wrapped up Arcelor, the entire steel industry knew that survival meant everybody had to upscale.
Tata Steel, with a puny domestic production of 5 million tonnes, was one of those watching from the sidelines -- it’s currently the 56th largest steel company in the world.
On Tuesday, when the Tatas moved centrestage by announcing an all-cash bid of 455 pence a share for 100% of Anglo-Dutch steelmaker Corus Group, the London markets shrugged it off by hitting an intra-day high of 500 pence before losing altitude.
The underlying message is clear: This is just the beginning. Like the Mittal-Arcelor bid earlier this year, the bidding for Corus won’t close at 455 pence for sure. The betting is that once the Tatas complete their discussions with Corus, a company more than three times the size of Tata Steel, the final price could be anywhere between 525-550 pence.
If, at 455 pence, the bid values Corus at $10 billion, 550 pence will take the valuation to $12.09 billion, making it the largest-ever Indian acquisition ever. It’s larger than the $12 billion wild guess commerce minister Kamal Nath has made about total inward foreign investment in 2006-07.
The challenge, in fact, could get even bigger and scarier for the Tatas, for Russian steel magnate Alexei Mordashov’s Severstahl, still licking its wounds over a failed bid for Arcelor, is widely believed to be keen on Corus.
To pull off the deal at the current bid value of 455 pence, the Tatas will have to shell out $7.6 billion (£4.1 billion), much of it in debt from the international markets. The costs may be daunting, but nobody’s questioning the industrial logic of the deal, which will create the fifth- largest steel combine in the world.
London-based steel industry analyst Raju Deswani welcomed the Tata bid and said it makes for a good fit. “Corus and Tata are a good match, complementing each other,” says Deswani, who is the global publisher for Metal Bulletin. He argues that the deal should go through fairly smoothly as there were no regulatory issues.
In a bland announcement in London, Corus confirmed that “it has received a proposal from Tata Steel regarding a possible recommended offer for Corus at a value of 455 pence per share in cash” and that discussions are taking place between Corus and Tata Steel.
In a notice to the stock exchange, Richard Shoylekov, Corus Group company secretary, emphasised, however, that “There can be no certainty that an offer will be made.”