How Tatas landed the killer punch

LONDON/MUMBAI: And so ends the winter of our discontent, on a cold January night in the one square mile of the City of London. For Ratan Tata, it ends almost a four-month-old battle to conclude the largest ever Indian over-seas acquisition.

For the City of London, which tends to be deserted by 6 pm on week-days and plays host to Bollywood shootings in the evenings, Tuesday night was one of unusual and hectic activity. At offices around London the midnight oil burned - the Takeover Panel was conducting the emailed auction a heartbeat away from the London Stock Exchange and St Paul���s Cathedral. In the shadow of Big Ben, in Westminster, Corus��� top brass monitored the event.

Camp Tata was parked in Primrose Street, just off Liverpool Street, the hub of the growing financial clout towards the east of the City. They were bidding from the offices of Herbert Smith. Arun Gandhi, Deutsche Bank, ABN Amro and Rothschild were there, along with a few key Tata executives, for moral support. CSN and its advisors were operating from Lazard���s offices in London���s West End.

About 8,500 kilometres away, sources say that Ratan Tata, B Muthuraman and Koushik Chatterjee had converted the Presidential suite at the Taj Mahal hotel into their base camp - it was easier to get sandwiches and coffee there than at Bombay House. They would have run through quite a few cups by the time the auction ended eight-and-a-half-hours after they entered the suite.

The auction itself was a clever mix of two different auction styles: English - what else did one expect - and the first-price ���sealed bid���. While the Tatas and CSN would not comment on the process of the auction, as per the instructions of the UK Takeover Panel, sources close to the deal said the auction was, towards the end, very exciting.

The auction started with both bidders given up to an hour to make their successive bids, but in case either side made a bid sooner than that, the auction moved into the next round. The final auction - slated to go on for 10 hours - actually lasted about 8-and-a-half to nine hours, and finished around 12:30 pm GMT.

In the initial rounds, the opponents reportedly circled around each other as is the case in an English auction where contestants simply keep increasing their bids. This also gave both Tata Steel and CSN an opportunity to gain some idea of what each other���s maximum limit could be, because they could each observe the way the bids were increased.

As both contestants headed into the last round, the tension was palpable on both sides. Though the bids were being emailed, this last round was the blind round with both players emailing their ninth round bids without knowing what the other had bid.

Unlike, the chess game of the previous rounds, the ninth was the shootout. And such a round - sealed bid - has two risks. Either the Tatas could bid too high and win but lose shareholder faith, or not have enough headroom to revise their bid upwards by a significant amount. As it turned out, Tatas had that extra breath left. Their final bid was 18 pence over the 8th round.

When the final email pinged on the computers, it felt like a bomb had dropped in the silent room - and then everything erupted, with champagne corks flying. In the Taj Mahal suite, the four senior men embraced each other, overwhelmed by the occasion, but charged with adrenaline. The Brazilians, perhaps felt the way they had in the World Cup last year: disappointed and drained. For them the day had ended too soon and night seemed far away. For Mr Tata and his team, the day had just begun.