Tata Steel expected to raise bid for Corus
London, Nov 20 (UNI) After Brazil's CSN made a counter-bid for Anglo Dutch steel-maker Corus on Friday, speculations are growing that Tata Steel will raise its proposed takeover offer of 455 pence per share, the largest ever by an Indian company.
The board of Corus had agreed, last month, to recommend the bid proposed by Tata to its shareholders. But the counter bid of 475-pence-a-share, 4.4 per cent higher than Tata's, by CSN (Companhia Siderurgica Nacional) is expected to change its decision.
Corus representatives are likely to meet with CSN officials this week to discuss the Brazilian firm's bid approach, which follows inconclusive merger talks held between the two companies in 2002.
Analysts say that Tata is not likely to walk away from efforts to acquire Corus and will up its own offer for the firm. ''We think it unlikely that Tata Steel will walk away from Corus after investing so much time and effort in the process,'' said Kotak Institutional Research in a note quoted by the Reuters news agency.
''(But) Corus is likely to find it difficult to continue to back Tata Steel unless the latter revises its bid upward,'' the note added.
However, Corus shareholders who believe that Tata's current bid is too low have welcomed the intervention by CSN. ''It is not a surprise that another bidder has emerged,'' said Standard Life in a statement on Friday. The insurer has a stake of just over 7.5 per cent in Corus and last month expressed concern that Tata's offer undervalued the company, which was formed in 1999 following a merger between British Steel and Dutch group Hoogovens.
Reportedly, Corus is eager to form an alliance with a steel-maker in either Brazil, Russia or India, in order to access the low-cost, high growth markets, while Tata and CSN want to tap the surging demand by adding to their mills in Europe and boosting bargaining power with their clients and suppliers.
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