Tata, CSN to go 9 rounds for Corus
Both the companies will each have a chance to raise their offer by at least 5 pence a share, reports Vijay Dutt.india Updated: Jan 28, 2007 03:11 IST
The ultimate winner of the Anglo-Dutch Corus Group PLC in the bidding battle that began on October 2006 will be known at 3 a.m. on February 1, after a dramatic finale comprising nine knockout rounds. Tata Steel and Companhia Siderurgica National (CSN) will each have a chance to raise their offer by a minimum of 5 pence a share to continue.
If the biding goes on till the ninth round, the bidders will have the option of making a final offer or of making an offer stating that if the rival bid is higher, they will exceed it by a certain amount. At that stage, they will have to state the maximum price they are ready to offer.
• Tata reportedly has the resources to raise its offer to 550p a share
• However, others say CSN’s desire to get Corus is so great that it may go as far as 600p a share
• The auction is expected to be completed by 2.30 a.m. (London time) on January 31 and the announcement made by 3 a.m.
• If the auction is not completed by this time, it is expected to re-commence no earlier than 4.30 p.m. and an announcement made by no later than 3 a.m. on February 1
At present, CSN’s offer is 515p a share, valuing Corus over £5 billion. Many believe Tata has enough resources to raise its offer to around 550p a share. But a few others said CSN’s desire to get Corus is so great, it may go as far as 600p a share.
The note sent by Corus to HT says: “On the basis that neither offeror has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist for the purposes of Rule 32.5 of the Takeover Code. In order to provide an orderly framework for the resolution of this competitive situation, and in accordance with Rule 32.5, the Panel Executive has, after discussions with the parties, established an auction procedure that, assuming a competitive situation continues to exist, is expected to commence at 4.30 p.m. (London time) on January 30.”
Once the auction has been completed by 2.30 a.m. (London time) on January 31, the Panel Executive expects to make an announcement by no later than 3 a.m. (London time) on January 31.
If the auction is not completed by 2.30 a.m., the Panel Executive would expect to freeze the auction procedure and to announce by 3 a.m. the prices of the highest cash bids (if any) lodged by each offeror at that point. In those circumstances, the auction is expected to re-commence no earlier than 4.30 p.m. and a further announcement would be made by the Panel Executive by no later than 3 a.m. on February 1.
The note says the parties have agreed to the terms of the auction procedure.
First Published: Jan 28, 2007 01:58 IST