Corus shares in seven-year high on speculation of Tata Steel bid

Our Corporate Bureau
19 January 2007

While Anglo-Dutch steel maker Corus' shareholders await Tata Steel's next move, the company's shares have hit a seven-year high amid reports that Tata Steel could substantially raise its bid for the firm.

Tata Steel and Brazilian firm CSN are locked in a keen acquisition tussle that has pushed up Corus' shares. Shareholders now expect Tata steel to potentially raise its offer to 600 pence a share. The winner would emerge as the world's fifth largest steel maker.

The Brazilian Companhia Siderurgica Nacional had trumped Tata Steel's enhanced bid of 500 pence with a counter-offer of 515 pence per share for Corus. Commentators say Tata Steel lost its first-mover advantage by its slow response to CSN's first bid that enabled the Brazilian firm time to woo Corus' pension fund trustees with a more generous contribution to the fund than offered by Tata Steel.

When Tata Steel did react after several days with its 500 pence enhanced bid, CSN reacted within hours the same day with its enhanced 515 pence offer.

Corus directors recommended CSN's bid last month, having earlier backed Tata's lower offer.
UK's market regulator has set a deadline of 30 January for the two firms to table further offers.

According to The Times of India, Tata Steel could up its offer to 530 pence per share and may be prepared to go as far as 600 pence if needed to secure the deal, a report denied by a Tata Steel spokesman.