Bidding War for Corus Steel in Final Days

The U.K. Takeover Panel has given India's Tata Steel until January 30 to top a 515 pence/share offer worth £4.9 billion from Brazil's Cia. Siderurgica Nacional [CSN] for Corus Steel, a deal accepted by the Corus board last month only hours after it accepted a 500p deal from Tata that valued Corus at £4.7 billion. Tata's shares slid 1.7% on rumors the company might raise its offer. Corus, the product of a 1999 merger between British Steel and Hoogovens , is the world's eighth-largest steel producer, but will rise to fifth-largest if it combines with either Tata or CSN. It has been subject to a bidding war since last October, when Tata submitted a 455 pence/share offer. There is speculation that Tata might raise its bid to somewhere between 520 and 600 pence a share, and CSN is rumored to have arranged additional financing in case Tata does come back to the table. If Corus accepts the CSN deal, it will gain access to high-quality, low-cost iron ore from Brazil and elsewhere in South America.

• Sources: Bloomberg, Ireland Online
• Related commentary: CSN Tops Tata Bid for Corus Group, Brazil's CSN Attempting to Steal Corus from Tata Steel, Metals and Mining: Blast Off!
• Potentially impacted stocks and ETFs: Tata Steel Ltd. (Bombay: 500470), Corus Group plc (CGA), Companhia Siderurgica Nacional (SID). Competitors: Mittal Steel Company NV (MT), Gerdau S.A. (GGB). ETFs: Market Vectors - Steel (SLX), SPDR Metals & Mining (XME)

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