MUMBAI: Tata Steel is expected to raise its offer to try to trump Brazil’s CSN before January 30 deadline for bids to take over Anglo-Dutch Corus Group Plc , analysts said.
The winner of the battle, which has pushed shares in Corus to seven-year highs, will become the world’s fifth-largest steel maker.
Companhia Siderurgica Nacional has agreed to buy Corus for 515 pence per share, or 4.9 billion pounds ($9.6 billion), topping two offers from Tata Steel, although the Indian company could still raise its bid before the deadline.
Corus shares ended Friday trade in London at 558 pence.
“Reports of 600 pence is too aggressive. Five hundred and eighty pence could be the highest which Tatas could go up to,” said Kanan Shah, analyst at Networth Stock Broking.
Tata Steel opened the bidding for Corus at 455 pence a share and raised it to 500 pence. CSN has made a sole bid of 515 pence per share.
Britain’s takeover regulator has said that if both companies remain in the running for Corus at 1630 GMT on Jan 30, it would allow up to nine rounds of rapid-fire bidding behind closed doors. A winner was expected to be announced by 0300 GMT on Jan 31.
“They (Tata Steel) are serious about the acquisition since it would open up access to new markets and a better product profile. They could make another bid,” said one analyst who did not want to be identified.
Macquarie Research in a note last month said “excluding any synergy benefits, we estimate the deal would be EPS (earnings per share) neutral for Tata Steel at 540 pence per Corus share.”
Both companies are keen to get Corus so they could be a significant player in the consolidating steel industry, where Dutch-based Mittal Steel last year bought Luxembourg’s Arcelor to create the world’s biggest steel-maker.
If Tata won the battle for Corus, it would be the biggest ever overseas acquisition by an Indian firm.