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Battle for Corus to be settled by auction

Source: PTI
January 27, 2007 12:02 IST
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With no final offers forthcoming from Tata Steel and CSN -- the two suitors for Corus -- the UK Takeover Panel has decided to put the Anglo-Dutch steel maker under the hammer on January 30.

The nine-round auction, which could see Corus' valuation shoot up to 11 billion USD, will start at 1630 hrs (2200 hrs IST) on January 30 and completed latest by 0300 hrs (0830 hrs IST) on February 1.

However, a winner could emerge before February 1 if the auction does not last the planned nine rounds.

"Neither offeror has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist for the purposes of Rule 32.5 of the Takeover Code," the Takeover Panel said in a filing on the London Stock Exchange.

Brazil's CSN has bid 515 pence a share against Tata Steel's 500 pence a share, but the Indian conglomerate has not said that its currently lower offer is final. Hence, the need for auction.

Of the maximum of nine rounds, eight rounds would be for the suitors to table a fixed price bid in cash. But in the event of the competitive situation continuing, a final round would be held to give chance to the offerors to outbid the other within a ceiling that has already been informed to the Panel.

As per information given to the Tatas and CSN by the Takeover Panel, there has to be a difference of at least five pence for each round of the bid between the two suitors.

Officials of the Takeover Panel have held talks with both Tata Steel and Companhia Siderurgica Nacional (CSN) to reach a formula to settle the takeover.

Tata Steel is expected to raise its current 500 pence a share offer for Corus above CSN's 515p bid. Corus shares closed up at 553p.

The condition that each bid in each of the nine rounds has to be five pence more than the other could mean that Corus shareholders could get even 600 pence a share if the fight between the two suitors lasts till the ninth round.

"All parties have agreed to the process," Takeover Panel's notice on LSE said.

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