UK firm's shares hit the roof on CSN's higher bid

MUMBAI: Brazilian steel giant CSN’s higher bid of 515 pence per share for acquiring Corus Group against the Tata Steel’s revised offer of 500 pence brought cheers to the investors in Corus. But, their counterparts in Tata Steel lost heavily as the Indian company’s share price crashed amid concerns over the fate of its $9.2-billion takeover bid.

The CSN offer, which is at a 3% premium over the Tata’s bid, triggered a good rally in Corus shares on the London Stock Exchange on Monday. The scrip was quoting 5.6% higher at 528 pence at the time of going to press. A total of 94 million shares had changed hands at that time.

The euphoria in the Corus shares was backed by CSN’s announcement that it has raised its offer for acquiring Britain’s Corus Group, topping the revised offer by Tata Steel. With the CSN’s offer, Corus is valued at £4.9 billion ($9.6 bn).

Corus stock has surged more than 80% in the current year on takeover speculation. Acquisition of Corus by either CSN or Tata Steel would create the world’s fifth-largest steel company. Tata Steel produced more than 5 million tonne in 2005-06, while Corus produced around 18 million tonne during the year.

Tata Steel shares were at the receiving end on Monday when the Sensex crashed 400 points amid all-round selling on the Indian bourses.

The scrip took a 6% hit to end at Rs 453.4, after touching the day’s low of Rs 438 and a high of Rs 482.7 during intra-day trading on the day. The selling took place amid higher volumes as a total of 44.4 lakh shares changed hands, compared to 17 lakh shares on Friday on the BSE.