What lies ahead in the Tata-Corus deal?

10 October 2006

It could be the largest deal by an Indian company and the largest steel deal ever, after Arcelor-Mittal. But Tata Steel's proposed takeover of Corus could well get mired in procedure. CNBC-TV18 reports on the takeover tangles that Tata must brace itself for.

Creating a steel behemoth is never easy. But it's tougher in Britain. And Tata Seel has its work cut out. It's keen on a company in Britain, which is known for stringent M&A codes. Sometimes, what is dismissed as market buzz in India, is viewed seriously by the British takeover panel.

First comes the regulatory disclosure on whether the possibility of a takeover exists. If it does, the code takes over and the company has to issue a statement to that effect.

With that, we now enter the offer period, where disclosure rules come in. This means that all entities involved in the deal must make daily disclosures of their stock holdings in the target company.

The duration of the offer period depends on the company that's buying — in this case, Tata Steel. Tata Steel must then put up or shut up — meaning it can either make an offer within the deadline it sets itself.

Failure to do so will mean the deal's off! Usually, such a deadline spans anywhere between six to eight weeks. With a firm offer in place, Tata Steel will have 28 days to send an offer prospectus to all shareholders.