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Tatas? Corus quest begins

The auction called by the UK Takeover Panel will decide Corus' fate, report Vijay Dutt and Yassir Pitalwalla.
None | By Vijay Dutt and Yassir Pitalwalla, London/mumbai
UPDATED ON JAN 31, 2007 05:01 AM IST

By Wednesday morning, the Anglo-Dutch steel major Corus will probably have a new owner.

The bidding war between Tata Steel and Brazil’s Companhia Siderurgica Nacional (CSN) to acquire Corus began on schedule at on Tuesday night India time. With the CSN bid of 515 pence per Corus share already on the table against the Tatas last bid of 500 pence a share, the Tatas were the first off the block, sending in a revised bid to the United Kingdom’s Takeover Panel which is overseeing the contest. The bids are being kept confidential until the final outcome.

Senior Tata and CSN officials were ensconced in their lawyers’ offices in London, conducting their battle over e-mail.

The rules allowed each side an hour’s time to make a counter-bid. The process was to go through a maximum of nine rounds, with the rivals raising their bids until one of them either failed to bid or backed out.

If both remained in the fray after all rounds, the auction was to have been decided by one last, sealed bid, with the prize going to higher bidder.

A 10-hour time limit had been set for the bidding. If the rounds were not completed by 8 am IST on Wednesday, the bidding was to stop, to be taken up again after trading hours.

To prepare for the bout, the Tatas had lined up commitments from bankers which would allow them to bid over $12 billion (6.5 billion pounds), which translated into a price of 550 pence per share. “We agreed to make funds available to allow Tatas to bid over $ 12 bn,” said a top official with one of the banks funding the takeover attempt.

The Corus stock traded at a seven-year high of 564 pence a share on the London Stock Exchange on Tuesday.

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