The fight for Corus has begun, with a Brazilian company, CSN, preparing a counter bid. CNBC-TV18 reports on how rating agencies and brokerages feel about India's biggest deal that is still in the making.
DSP Merrill Lynch is happy with Tata Steel's offer. It has valued Corus at between 414 and 517 pence a share. So, it figures the 455 pence offer is attractive.
Tata Steel will get access to higher value-added steel markets, which should stabilise average realisations. But Merrill Lynch says the deal does not offer Tata Steel cost synergies or a growing market.
CLSA says the acquisition can catapult Tata Steel onto the global map. But it sees no obvious immediate benefits for it. On the contrary, issues like equity dilution, integration with Corus and longer-term opportunity loss, after the investment in Corus, might affect Tata Steel's share price near-term.
Rating agency Standard & Poor's has put a credit watch on Corus with positive implications from a likely acquisition by Tata Steel. It could rise if the deal goes through. But Tata Steel has been placed on credit watch with negative implications.
also see : S&P places
Corus on 'positive' watch list, Tata Steel on 'negative'