Corus to send Tata offer to shareholders

MUMBAI: CORUS is expected to send an offer document to its shareholders within the next fortnight on the $8.1-bn bid by Tata Steel and will follow up with an extraordinary general meeting (EGM) in December. This is in line with the Indian company’s estimation that the acquisition will be complete by January ’07.

Agency reports from London said that the EGM may be held on December 4, but the date was not confirmed by the Anglo-Dutch company. An e-mail query sent to Corus remained unanswered. A senior Tata Steel official declined to comment, adding, “It is on Corus to take a call on this.” The report added, “The date has been moved around over the past week, and is subject to further change.”

In a joint statement on October 20, the two companies had agreed on the multi-billion dollar deal, pegged at 455 pence per Corus share. It will see Tata Steel take control over Corus, six times its size in production and three times in revenues. The deal will make the Indian major the fifth-biggest steel company globally.

According to the scheme of arrangement of the acquisition, Corus will have to get approval from 75% of the shareholders, including at least half from those attending the EGM. Once attained, the offer will go to a local court for the final assent.

Tata Steel shares fell 0.5% to Rs 487.2 on Thursday. At the time of going to the press, Corus shares were up 0.7 pence at 468.7 pence. The latest development will also be a boost for the Indian steel maker after two of the three largest Corus shareholders disapproved of the offer price.

Anthony Bamford, head, JCB, a construction machinery company, said he was “saddened and disappointed” with Corus’ acceptance. JCB holds a 2% stake in Corus.

Standard Life Investments, which owns 7.9% was reported to be opposed to the deal. Another major institutional investor in the Anglo-Dutch company is Legal & General Investment Management with a 3.8% stake.