Tata Steel Wins Corus in an All-Night Auction

In an auction that went 'the full nine rounds' and lasted into the early hours of the morning, India's Tata steel triumphed in its takeover bid for Corus at a final price of 603 pence ($11.82), a 49% premium on its closing price before Tata Steel declared its intent to buy Corus on Oct. 20, 2006, and five pence higher than CSN's bid of 603 pence. Tata's original offer was for 455 pence a share. Corus Shares closed yesterday at 563 pence, and jumped this morning to 602.5 pence (+7%); Tata shares dropped 7.7% on the news. A Tata executive said investors were taking the short view and defended the price paid, saying, "Tata and Corus are stronger together and will be able to compete effectively in an increasingly global environment." The deal creates the world's fifth largest steelmaker.

• Sources: MarketWatch, Wall Street Journal
• Commentary: Bidding War for Corus Steel in Final Days

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• Stocks and ETFs to watch: Corus Group (CGA), Tata Motors Ltd. (TTM), Companhia Siderurgica Nacional [CSN] S.A. (SID). Competitors: Arcelor Mittal (MT), POSCO (PKX), United States Steel Corp. (X). ETFs: Market Vectors Steel (SLX), SPDR Metals & Mining (XME), iShares Dow Jones US Basic Materials Index (IYM), Vanguard Materials VIPERs (VAW), PowerShares Dynamic Basic Materials (PYZ), PowerShares FTSE RAFI Basic Materials ETF (PRFM), SPDR Material (XLB), Rydex S&P Equal Weight Materials (RTM)

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