Tata Steel ups the ante; hikes Corus offer to $9.17 billion

Rex Mathew
11 December 2006

Tata Steel, in its quest to emerge as the world's fifth-largest steel manufacturer, may well have delivered a knock-out punch to its Brazilian competitor CSN with a revised offer, forcing it to fall out of the race to acquire Corus Group Plc.

Early today, Tata Steel said it was hiking its acquisition offer from 455 pence, per share of Corus Group, to 500 pence per share.

CSN had last month indicated that it is willing to make an offer at 475 pence per share, subject to due diligence and arranging sufficient funding, but is yet to make a firm offer.

The board of directors of Corus, after getting advice from Credit Suisse, JP Morgan and HSBC, has recommended the revised offer to its shareholders. The company directors have also undertaken to vote in favour of the acquisition by Tata Steel at the shareholders' meeting to be called later, in respect of their personal holdings representing 0.1 per cent of the share capital.

Standard Chartered Bank and Standard Chartered First Bank of Korea have extended additional funding for the higher offer to Tata Steel and its associate company Tata Steel Asia Holdings.

This funding is in addition to the funding already secured by Tata Steel UK, the company through which Tata Steel made the earlier bid. Corus Group said ABN Amro and Deutsche Bank, advisors to Tata Steel, are satisfied that sufficient resources are available to satisfy in full the consideration payable to Corus shareholders under the proposed terms of the revised acquisition offer.