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Friday, Sep 20, 2019

Tatas won after 8 hrs of tense bidding

In the ninth and final round, Ratan Tata himself advised Gandhi to declare that Tata was prepared to bid five pence higher, reports Arun Kumar and M Sabarinath.

india Updated: Feb 01, 2007 00:59 IST
Arun Kumar and M. Sabarinath
Arun Kumar and M. Sabarinath

Tata Steel won the battle for the takeover of Corus on Wednesday morning agreeing to pay a final price of 6.2 billion pounds (Rs 54,450 crore) after eight hours of tense bidding against the Brazilian steel major CSN.

With this acquisition, by far the biggest ever by an Indian company overseas, Tata Steel becomes the fifth largest steel manufacturer in the world.

The drama began on Tuesday afternoon with Arun Gandhi, the Tata Group's Mergers and Acquisitions head, Kaushik Chatterjee, Tata Steel's Chief Financial Officer, and Sandeep Biswas, Tata Steel's Marketing Head arriving in the London offices of the group's UK lawyers, Herbert Smith. They were accompanied by their bankers and advisors, top officials of ABN Amro Bank, Deutsche Bank and NM Rothschild.

The broad strategy had been hammered out earlier by them at a closed door meeting at a plush suite in Buckingham Gate Hotel. Yet taking no chances, Ratan Tata from Mumbai kept personally directing the team moves throughout, assisted by NA Soonawala, Tata Sons Vice Chairman, and B Muthuraman, Tata Steel's Managing Director. All of them spent an entirely sleepless night at Mumbai's Tata-owned Taj Mahal Hotel.

The CSN team, led by Octavio Lazcano, its Chief Financial Officer and assisted by Goldman Sachs, McFarlanes and Lazard, operated from Lazard's London headquarters.

The Corus chairman Jim Leng and chief executive Philippe Varin, were stationed at the offices of their own law firm, Slaughter and May, carefully following the proceedings.

"I was determined to win," Arun Gandhi told the Hindustan Times in a telephonic interview from Mumbai after the drama ended. "Right from the beginning, we kept raising the offer price."

Starting at 4:30 pm London time, the battle went through eight rounds of bidding, with both sides submitting bids by e-mail before the UK's Takeover Panel which was overseeing the process.

In the ninth and final round, Ratan Tata himself advised Gandhi to declare that Tata was prepared to bid five pence higher than whatever price per share CSN put up.

CSN made its final offer at 603 pence a share, at which the deal was sealed for Tatas at 608 pence a share.

It was followed by the Takeover Panel's formal announcement that the Tata group had won the bidding. A beaming Ratan Tata immediately congratulated his entire team.

"I must tell you we were prepared to go even beyond 608 pence per share. We had set a limit for ourselves before we set out for the auction which was higher," Gandhi revealed.

"We sensed CSN's combative mood when it started talking about its synergies with Corus. We were sure CSN would go past the 600 pence per share mark." He added: "But we decided to cross 600 pence only last week."

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First Published: Feb 01, 2007 00:59 IST