Paying dearly

31 January 2007 By Taron Wade

Access to Europe is a good justification. But if the Tata family is mainly trying to keep up with the Mittals, it s a high price to pay. The Indian steelmaker has stumped up £6.7bn to get Corus. It beat CSN by paying 34% more than its first bid in October.

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Tata Steel has won the auction for Corus with a board recommended 608p per share bid, valuing the AngloDutch steelmaker at £6.7bn, including debt. Tata beat Brazil's Companhia Siderurgica Nacional (CSN) in an auction that went nine rounds into the early hours of the morning. CSN's final bid was 603p.

Tata's share price was down 10.5% during the first few hours of trading. The Indian steelmaker first agreed a bid with Corus on October 20 for 455p per share, a discount of 4% to Corus' 471p per share price at the time. On November 17, CSN made an approach at 475p per share. In response, in early December, Tata raised its bid to 500p and CSN shortly afterward topped Tata with an agreed 515p per share offer.

The bidding war lasted eight rounds, and then went to a final stage of a sealed cash offers. Participants could either put in a maximum cash bid or agree to pay a set amount over the other offeror subject to a specified maximum cash amount.

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