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Tata Steel - Acquisition of Corus Group Plc, UKnews
31 January 2007

Tata Steel Ltd has announced that on October 20, 2006, the Company announced a cash offer of 455 pence per share for Corus Group Plc. (Corus), valuing it at GBP 4.3 billion. Further, on December 11, 2006, the Company announced the terms of a revised offer for Corus at 500 pence per share, valuing it at GBP 4.7 billion.

On conclusion of the auction process conducted by the UK Takeover Panel on January 31, 2007, for the acquisition of Corus, the Company has agreed the terms of an increased acquisition (the Revised Acquisition), at a price of 608 pence per share in cash for acquisition of Corus. The terms of the Revised Acquisition value the entire existing issued and to be issued ordinary share capital of Corus at approximately GBP 6.2 billion. The revised offer of the Company is higher by 5 pence than the final offer made by Companhia Siderurgica Nacional (CSN) in the auction.

The acquisition is proposed to be effected by means of a scheme of arrangement under Section 425 of (English) Companies Act 1985, subject to, inter alia, High Court of Justice in England and Wales and Corus shareholders' approvals being obtained.

This announcement is not intended to and does not constitute, or form part of, or any offer or invitation to purchase any securities or the solicitation of any vote or approval in any jurisdiction.

Revised Acquisition of Corus by the Company
Following the conclusion of the auction process conducted by the Panel in accordance with Rule 32.5 of the Code (the "Auction"), the board of the Company is pleased to announce the terms of a proposed increased Acquisition (the "Revised Acquisition") at a price of 608 pence in cash per Corus Share, being 5 pence per share higher than the Offer by Companhia Siderurgica Nacional ("CSN") of 603 pence in cash per Corus Share.

Details of the terms of the original Acquisition, which was recommended by the Board of Corus, were set out in the scheme document posted to Corus Shareholders on November 10, 2006 (the "Scheme Document").

In accordance with the Auction rules published by the Panel on January 26, 2007, following this announcement, the Company will be seeking a recommendation for the Revised Acquisition from the Board of Corus.

It is anticipated that, subject to a number of factors, including the timetable requirements of the Court, satisfaction of the Conditions and receiving a recommendation for the Revised Acquisition from the Board of Corus, the Effective Date and the despatch of consideration pursuant to the Scheme to Corus Shareholders will occur around the middle of March 2007.

Defined terms in this announcement have the same meaning as in the Scheme Document

1. Terms of the Revised Acquisition

Under the terms of the Revised Acquisition, Corus Shareholders will be entitled to receive 608 pence in cash for each Corus Share (the "Revised Price"). This represents a price of 1216 pence in cash for each Corus ADS.

The terms of the Revised Acquisition value the entire existing issued and to be issued share capital of Corus at approximately £ 6.2 billion and the Revised Price represents:

(i) an increase of approximately 33.6 per cent, compared to 455 pence, being the Price under the original terms of the Acquisition;

(ii) on an enterprise value basis, a multiple of approximately 7.0 times EBITDA from continuing operations for the year ended December 31, 2005 and a multiple of approximately 9.0 times EBITDA from continuing operations for the twelve months to September 30, 2006 (excluding the non-recurring pension credit of £ 96 million);

(iii) a premium of approximately 68.7 per cent, to the average closing mid-market price of 360.5 pence per Corus Share for the twelve months ended October 04, 2006, being the last Business Day prior to the announcement by the Company that it was evaluating various opportunities including Corus;

(iv) a premium of approximately 49.2 per cent to the closing mid-market price of 407.5 pence per Corus Share on October 04, 2006, being the last Business Day prior to the announcement by the Company that it was evaluating various opportunities including Corus; and

(v) a premium of approximately 21.6 per cent to the revised acquisition announced by the Company on December 10, 2006 at a price of 500 pence per Corus Share.

The terms of this Revised Acquisition described in this announcement remain subject to the Conditions and do not affect the Company's intentions regarding the business of Corus, its management, employees and locations, nor the proposals relating to Corus's pension schemes, the Corus Share Schemes or cancellation of the Deferred Shares, each as described more fully in the Scheme Document.

Further details of the Revised Acquisition will be contained in a circular which is expected to be posted by Corus to Corus Shareholders in due course and in any event in advance of the EGM and Court Meeting (the "Revised Scheme Document"). On December 04, 2006 the original EGM and Court Meeting of Corus were adjourned to December 20, 2006, and on December 20, 2006 at the reconvened EGM and Court Meeting it was resolved to adjourn the meetings until further notice. The Revised Scheme Document will contain advice to Corus Shareholders on the action that shareholders should take at those meetings.

2. Financing

Save as described in the paragraph, the financing arrangements relating to Tata Steel UK, as described in Part Nine of the Scheme Document, remain in place. The financing arrangements put in place by the Company prior to announcement of its revised offer for Corus on December 10, 2006 also remain in place. The additional finance required under the proposed terms of the Revised Acquisition will be funded by way of a combination of additional credit facilities and a cash contribution by the Company to Tata Steel UK.

ABN AMRO and Deutsche Bank, as joint financial advisers to the Company and Tata Steel UK, are satisfied that sufficient resources are available to satisfy in full the consideration payable to Corus Shareholders under the proposed terms of the Revised Acquisition.

3. Implementation Agreement and Inducement Fee

The Implementation Agreement as described in the Scheme Document remains in effect. The amount of the Inducement Fee referred to in the Implementation Agreement is 1 per cent of the value of the recommended offer announced by the Company and Corns at December 10, 2006 calculated by reference to the price per Corus Share and the fully diluted share capital of Corus, together with an amount equal to any VAT which is recoverable by Corus (if applicable).

4. Disclosure of interests in Corus

Tata Ltd, a majority-owned subsidiary of Tata Sons, holds 2,125 Corus Shares. Since Corus Shares held either by members of the Tata Steel Group or by Tata Ltd are excluded from the definition of Scheme Shares, the Company will not be entitled to vote these Shares at the Court Meeting.

The interests of the Deutsche Bank Group consist of as at January 26, 2007, a long position of 4,059,945 Corus Shares and a long position of 472,597 Dutch Bonds.

Following the recommendation by the Corus Directors of the CSN offer, the irrevocable undertakings the Corus Directors gave to vote in favour of the Acquisition, as described in the Scheme Document, have lapsed.

Except as disclosed in this paragraph 4, as at January 26, 2007, being the last practicable date before this announcement, neither the Company or Tata Steel UK, nor any of the directors of the Company or Tata Steel UK, nor so far as the Company and Tata Steel UK are aware, any person acting in concert with the Company or Tata Steel UK, (i) has any interest in or right to subscribe for any relevant Corus securities, nor (ii) has any short positions in respect of relevant Corus securities (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, nor (iii) has borrowed or lent any relevant Corus securities (save for any borrowed shares which have been on-lent or sold).

5. Dutch Bonds

Appropriate consent from holders of the Dutch Bonds for the proposal to redeem the Dutch Bonds early (two business days after the Effective Date) has been obtained, but such consent will expire on February 28, 2007. As the Effective Date is now unlikely to occur before that date, a new proposal will be made to holders of Dutch Bonds in due course on substantially similar terms to the original proposal.

6. General

Save as set out above, in all other respects, including the availability and terms of the Loan Note Alternative, the Revised Acquisition will be subject to the Conditions and on the same terms set out in the Scheme Document.

also see : CSN blinks at 603p, Tata Steel bags Corus for $11.3 billion

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Tata Steel - Acquisition of Corus Group Plc, UK