Citywire
Tata wins Corus auction on sky high £6.2-billion bid
Published: 10:21 Wednesday 31 January 2007 By: Colin McClelland, Shares Editor
Corus management was buoyant on its £6.2 billion price tag for new owner Tata Steel of India and said UK plant closures were not in the offing to help pay for it.
The smaller Tata bought Corus (CS.) for 608p a share, beating Companhia Siderurgica Nacional of Brazil's rival offer of 603p in an auction which began yesterday afternoon at the close of the market and ended around 1:30 this morning.
When the two companies are brought together they will become the world's fifth largest steel maker. The Corus board unanimously approved the merger at a meeting this morning.
Chief executive Philippe Varin told reporters on a conference that call the merger would create synergies for raw materials while on the revenue side there were marketing opportunities for packaging and automotive parts in Asia.
'This combination is globally competitive,' Varin said. 'We have to have access to low-cost production.
He said there were no plans to shed operations in the UK to help pay for a price that exceeded what most analysts said Corus would earn.
'We don't have any plans for job cuts in the context of this merger,' Philippe said. But he added that measures to increase competitiveness would be included 'by all means'.
'The best future for employees is a globally competitive company,' he said.
Varin said it was too early to quote figures on synergy cost savings, but said it would be a phased process
Tata first offered 455p a share on 20 October, then increased it to 500p on 10 December. CSN offered 515p a share on 11 December in a £4.9-billion bid. Since then the price of Corus shares have been at seven-year highs.
Corus shares gained 39p to 602p this morning, valuing the company at £5.69 billion, still shy of the Tata bid.
The auction run by the UK Takeover Panel was scheduled to end after eight rounds, but Corus management declined to say in which round the final bids were cast.
Varin said: 'The process was comprehensive and full and we had a long night'.
The winning bid announcement was followed by a 'few hours kip' then a full board meeting before 7 am, he added.
-- My humanity is in feeling we are all voices of the same poverty. - Jorge Louis Borges