Tatas ready to raise Corus bid
Analysts say the bid will be tough for both Tatas and CSN as the Corus scrip is trading at an all-time high, report Lalatendu Mishra and Indulal PM.india Updated: Jan 30, 2007 12:16 IST
Tata Steel’s board meeting on Tuesday, to be chaired by Ratan Tata, is expected to raise the company’s offer for Anglo-Dutch steelmaker Corus above rival bidder Companhia Siderurgica Nacional (CSN) of Brazil. Investment bankers say the Tatas may increase their bid from the last offer they made by 20 pence (Rs 17.31) per share to 520 pence (Rs 450.13), topping CSN’s 515 pence (Rs 445.70) bid.
There will be a nine-round auction for Corus on Tuesday.
“We will decide to what extent the bid can be raised,” said a Tata source requesting anonymity. “The Tatas would be happy with a price between 540 and 550 pence (Rs 467.34 and Rs 475.99).”
Investment bankers led by N.M. Rothschild and Tata Sons director Arun Gandhi are in London preparing their strategy for the bidding.
Analysts said the bid would be tough for both Tatas and CSN as the Corus scrip was trading at an all-time high, closing at 558 pence (Rs 482.91) on the London Stock Exchange on Friday.
While the final bid for Corus could rise above $11 billion (Rs 48,653 crore), questions are being raised about whether that is a fair value for the company and whether the high price could lead to job cuts later.