Tatas on Monday raised the offer to acquire Corus Group Plc to $9.2 bn from the original $8.1 bn and the Board of the Anglo-Dutch steelmaker has recommended the higher bid to its shareholders.
Tatas' revised bid of 500 pence per Corus share comes as a surprise ahead of rival Brazilian bidder CSN's formal offer. The Rio de Janeiro-based firm had last month announced it would make a counter offer of 475 pence compared to the Indian corporate's original offer of 455 pence.
Commenting on the announcement, Tata Steel Chairman Ratan Tata said, "We remain convinced of the compelling strategic rationale of this partnership and the revised terms deliver substantial additional value to Corus shareholders."
Corus Chairman Jim Leng said, "The Revised Acquisition terms from Tata Steel are a substantial increase from the previous offer. Accordingly, the Corus Board are pleased to recommend this to Corus Shareholders."
Tatas said in a statement: "Tata Steel is pleased to announce it has agreed to an increased recommended acquisition at a price of 500 pence in cash per Corus share."
The terms of the revised takeover bid value the entire existing issued and to be issued share capital of Corus at about $4.7 bn ($9.2 bn), the statement said, adding after acquisition Tatas would explore all strategic alternatives to manage its financial exposure and enhance it through additional synergies.
The additional funds were committed through two letters of credit agreements entered this month between Tata Steel and its subsidiary Tata Steel Asia Holding Plc with Standard Chartered Bank and Standard Chartered First Bank of Korea.