Business Daily from THE HINDU group of publications
Wednesday, Nov 22, 2006
ePaper


News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Home Page - Steel
Corporate - Mergers & Acquisitions
Get Latest BSE Quote
Takeover battle for Corus looms large

Our Bureau


Tata moves
Analysts tracking the development say that Tata, after having invested so much time and energy on the deal, is preparing to increase its bid, but to what extent would depend on the length CSN is willing to go for Corus.

Mumbai , Nov 21

A price war between Tata Steel and Brazilian steel-maker CSN appears to be on the cards for the takeover of Anglo-Dutch steel company Corus.

Reports from Bombay House, the corporate office of Tata Steel, and CSN headquarters indicate that both the rivals are in no mood to walk away from the deal at this stage, suggesting that they are preparing to enter into a long drawn battle by increasing their respective bids.

The situation arose after CSN came up with a 475 pence-a-share offer for Corus last week, trumping Tata's earlier offer of 455 pence-a-share.

Tata Steel, which has scheduled a board meeting on Thursday to take stock of the situation post CSN offer, is however not expected to make a move until CSN places a final bid on Corus's table. Also, the response of Corus to the CSN offer will be taken into account before Tata makes public its next move.

Analysts tracking the development say that Tata, after having invested so much time and energy on the deal, is preparing to increase its bid, but to what extent would depend on the length CSN is willing to go for Corus.

Reports in the British media indicated that CSN is prepared to further increase its bid for Corus control. A senior official of CSN was quoted in a British paper as saying that the company has been offered financing for much more than 100 per cent of the proposed purchase value, clearly sending signals that it was prepared to further increase its bid if Tata upped its 455 pence offer.

S&P rating

Standard & Poor's kept its `BBB' long-term corporate credit and senior unsecured bank loan ratings on Tata Steel on CreditWatch with negative implications, following CSN's counter-bid. "The size of the acquisition and the potential cash outflow that Tata Steel might experience from its existing or revised offer for Corus could have an adverse impact on its financial risk profile. A successful acquisition, however, can potentially improve the business risk profile of the merged entity," an S&P note said.

At the same time, it kept its `BB' long-term corporate rating on Corus on CreditWatch with developing implications, following CSN's counter-bid.

S&P has pointed out that the proposed new offer from CSN has "increased uncertainties over the potential outcome for Corus".

Related Stories:
CSN begins due diligence on Corus; Tata Steel scrip down
Top brokers upgrade target price for Corus
Tatas to buy Corus for $8 b
`Tata Steel may not have to outbid CSN offer'
Ratan Tata came to know of it at The Times, London

More Stories on : Steel | Mergers & Acquisitions | Tata Steel Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Adclub BL Hiring

Stories in this Section
Hu, Manmohan find common ground


`Low' splits; remnant brings rain to west coast
Urad prices dip on hopes of better crop
DoT shortlists 21 cos for rural infrastructure
India Inc eager to get in touch with Hu's who
About 3,000 retail investors offered 7 m Infosys shares
Dividend season begins for equity funds
Cairn expects more from Rajasthan field
Reliance Energy emerges lowest bidder for PowerGrid projects
Takeover battle for Corus looms large
Infy closer to Nasdaq 100
Narayana Murthy richer by close to Rs 1,000 cr
`Basel II delay is a blessing in disguise'
Cap on duty-free vanaspati imports from Lanka
Western India to change hands?
IPO case: Depositories told to pay back Rs 116 cr


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line