Steel crazy

20 March 2007 By Nicole Lee

Steel has traditionally been highly cyclical and capitalintensive. That sounds like a nogo for private equity. BoehlerUddeholm is in the more stable specialty sector, but CVC would still be taking its chances on profitability staying high.

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Luxembourgbased European buyout firm CVC Capital said on March 19 it is in talks with Austrian stainless steel producer BoehlerUddeholm over a possible takeover. CVC said it has already held preliminary talks with the management board of BoehlerUddeholm and its largest shareholder, BU Industrieholding, which owns 21% of the company.

CVC said it would only make an offer with the board's approval. If CVC were to buy Boehler, the company will keep its publicly listing and its head office in Austria, CVC said.

CVC also said it was surprised at the recent surge in Boehler's share price. Boehler's share price soared by 30% on March 15 to E81, but have since fallen back to E67.

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