Corus board approves Tatas'' offer
19 October 2006
Mumbai: The board of the Corus group, the Anglo-Dutch steelmaker, is believed to have approved Tata Steel''s $8.6 billion takeover offer. The board is likely to make a formal announcement tomorrow, a Financial Times report quoting sources close to the discussions claimed.
While Tatas offered the company 455 pence per share of the company, Corus shares have been trading at levels higher than that on expectations that another bidder will attempt to counter Tata Steel''s offer.
However, such a bid seems unlikely. Corus has also been looking for a buyer for most of this year and has previously talked to nearly all potential candidates.
Reports also point out that potentially thorny issues such as clearance from the trustee of Corus'' pension fund have already been negotiated.
The deal, if clinched, would increase Tata Steel''s capacity to 23-million tonnes from the current 5-million tonnes, making it the world''s sixth largest steelmaker.
Tata Steel, however, may have to provide guarantees on the terms and conditions of employment for Corus'' UK employees and on pay and pensions. The UK steelworkers'' union, Community, meanwhile, sought safeguards on wages and pension for Corus employees.