Corus postpones shareholders meeting even as CSN''s bankers accumulate

The board of the Anglo Dutch steel maker, Europe's second largest, has postponed its shareholders meeting, earlier scheduled from 4 December to 20 December, to enable Brazilian steel maker CSN more time to put up a counter bid to the Tata offer. (See: Brazil's CSN ups Tata offer with $8.1-billion rival bid for Corus)

The board had earlier scheduled the meeting for 4 December to get a shareholder vote on the 455 pence a share offer from Tata Steel, that it had announced its backing for. (See: Corus chief supports Tata Steel offer at European industry meet)

Goldman Sachs, which has extended a credit line to finance CSN's bid for Corus Group, and UBS, which is advising CSN in its bid, have reportedly hiked their holdings in Corus. While funds managed by Goldman Sachs have reportedly picked up close to 4 per cent, UBS has reportedly hiked its investments to nearly 7.5 per cent from just over 6 per cent.

CSN had declared last week that it has picked up a 3.8 per cent stake in Corus through open market purchases. In addition, CSN's main banker Barclays holds a 4.7 per cent stake in Corus. As a result, CSN, its bankers and financial advisors together hold nearly 20 per cent of Corus Group.

This is seen as a smart move by CSN to get enough shareholder support and force the Corus board to back its offer. The Corus board cannot ignore the wishes of shareholders who hold a combined 20 per cent stake in the company. Other minority shareholders may also be influenced by this group and decide to wait for a much higher bid by Tata Steel.

Standard Life Investments remains the single largest investor in Corus with a stake of 7.8 per cent. Standard Life had expressed dissatisfaction at the price offered by Tata Steel without giving any indications about an acceptable price.