Corus CEO defends Tata Steel takeover bid

Duesseldorf (Germany), Nov 10: Corus Chief Executive Philippe Varin on Friday defended the 4.3 billion pound (.20 billion) agreed takeover offer from Tata Steel that would create the world's fifth-largest steelmaker.

''We think it is definitely a good offer,'' he said at an industry conference in Germany. ''It is the right partner at the right time.'' The Anglo-Dutch steelmaker last month approved the Tata offer, which Varin said remained on track. Official offer documents could be published later on Friday or on Saturday, he said, expressing confidence the deal could close by January.

Standard Life Investments, Corus's biggest shareholder with a 7.9 percent stake, said at the time that the offer of 455 pence per share did not represent ''significant value''.

''It has happened that shareholders say 'It is not enough','' Varin said, but added it was not up to him to comment on any potential counteroffers.

People close to the deal have played down prospects for a counteroffer, although some bankers think the combined entity could be an attractive takeover target one day.

Corus shares traded at 470.50 pence at 1028 GMT, suggesting the market still factored in prospects for a higher offer.

Varin pointed out that Tata's bid represented a 26 percent premium to Corus's share price over the past 12 months.

A six-person committee, evenly divided among representatives of the companies and led by Tata Steel Chairman Ratan Tata, would drive the integration, Varin said.

He declined to discuss potential synergies from the transaction. Asked about job cuts, he said the deal was more about growth than about reducing Corus's 47,000 staff.

The deal, India's largest ever foreign takeover, extends a wave of consolidation in the fragmented steel sector and follows Mittal Steel's billion acquisition of rival Arcelor this year.

Consolidation in the steel sector is set to continue, said Varin, who is also head of European steel association Eurofer.

He cited China and Russia in particular as places where merger activity could accelerate, but said more steps were also possible in Europe.

Varin said he was confident that demand for steel in Europe would remain strong but added the sector had to keep an eye on imports from China and on energy prices.

Reuters