Steel

Corus investors shouldn’t bank on CSN counterbid

23 Oct 2006

The Brazilian group is the most likely candidate to make a counterbid for the AngloDutch steelmaker. But investors shouldn't be hopeful. CSN would get similar synergies to rival Tata. But financing will be hard unless CEO Steinbruch is willing to be diluted that's unlikely.

Tata bags Corus with £5.1bn bid

20 Oct 2006

The Indian steel group is counting on about £200m of synergies to justify its acquisition of the AngloDutch steel group. On that basis, it doesn't look such a stretch. Whether similar cost savings would be enough to tempt rival steel groups remains to be seen.

Corus can’t let bidders slip away

19 Oct 2006

Even though Tata's indicated bid is below the share price, Corus isn't trying to nudge it up by pursuing alternative bids, despite interest. That's sensible. The first task is to hook Tata. A rival bid isn t a sure thing. If Tata gets scared away, Corus could end up emptyhanded.

Corus shareholders shouldn’t hold their breath

17 Oct 2006

Tata Steel s 455p a share offer for the AngloDutch steelmaker will come as a disappointment to investors hoping for something over 500p. Sure, Tata will have to improve for a recommendation. But not much. The numbers already looked stretched, and a rival bid looks less likely.

Tata won’t find it easy to fund Corus bid

12 Oct 2006

It's too risky for the Indian steelmaker to acquire its UK rival for debt. But keeping a sensible gearing ratio would require £2bn equity. That's tricky. It requires Tata to raise heaps of cash from its investors. Unless Corus is seriously attractive, it may be hard to do so. It's too risky for the Indian steelmaker to acquire its UK rival for debt. Keeping a sensible gearing ratio would require £2bn of equity.

Aluminium mega-merger promises London-listing

9 Oct 2006

That s what the fine print of the deal between Rusal, Sual and Glencore says. Without this, Sual would have pushed ahead with its own IPO. Ultimately this track may deliver more value. But forcing Rusal to stick to its side of the bargain could prove more tricky.

Corus is no bargain at these levels

8 Oct 2006

After a 22% rise last week, the AngloDutch steel group now trades at a premium to ArcelorMittal, despite making much lower margins. For a potential bidder, Corus s main attraction is its scarcity value. It s the last big opportunity to buy into the European market.

Corus looks big mouthful for Tata to swallow

5 Oct 2006

Just because one Indian steel magnate has landed a European deal doesn t mean Tata will too. Corus looks a large and expensive target. Until Tata can show it s doing more than playing copycat, investors should treat its approach with caution.

Arcelor Mittal loses another round in E5bn Brazil fight

26 Sep 2006

The securities regulator has ruled that the steelmaker has to make a bid for the 33% minorities in Arcelor s Brazilian subsidiary. But the story is not yet over. Arcelor Mittal may yet wriggle out, and it could get away with a much lower offer.

Silence is golden for new Arcelor Mittal boss

6 Aug 2006

Roland Junck refused to join his Arcelor colleagues in rubbishing Mittal s hostile bid. His reward is the top job at the merged group. But integrating and managing these two very different companies is an enormous challenge. To succeed, he ll need to become more vocal.

Arcelor’s Severstal merger voted down by slim margin

30 Jun 2006

96% of EGM attendees voted against the deal. But that only amounted to 58% of total capital not that much above the 50% minimum required. This was only achieved after a shareholder rebellion and change in the board's recommendation. That shows how undemocratic the process was.

Mordashov’s proposal contains worrying loophole

23 Jun 2006

The Russian s merger scheme with Arcelor could allow him to cut a sweetheart deal with a biggish shareholder like Zaleski. That could leave other shareholders out in the cold. If Arcelor s board is minded to stick with Mordashov, it must plug the loophole.

Arcelor board must demonstrate independence

22 Jun 2006

As the battle over the steel giant s future draws to an end, directors must assess dispassionately what is in shareholders best interests. The onus is on international figures, like E.on s Hartmann, to ensure that shareholder value drives the choice between Mittal and Severstal.

Arcelor retreat raises hopes of a fair fight

20 Jun 2006

With the board talking to both sides, a shareholderfriendly outcome is now possible. But investors mustn't drop their guard. The French steelmaker had to cancel its share buyback vote or face a heavy defeat. That suggests shareholders are now calling the shots.

Arcelor is giving Mordashov near-control without a premium

14 Jun 2006

The Russian steel billionaire will have a veto on key strategic matters if the proposed merger of his Severstal and Arcelor goes ahead. All the more reason why Arcelor shareholders should try to block this deal and instead back Mittal's bid, which does involve a premium.

Arcelor battle ensnared in complex timetable clash

5 Jun 2006

The Luxembourg group has to decide how to reconcile shareholder demands for a fair vote on its Severstal merger with its own sham vote. Whatever it decides is fraught with legal complexity. It is like a multidimensional chess game played against the clock.

Arcelor should foreswear any more mischief

1 Jun 2006

It should hold a fair vote on its Severstal merger as demanded by 30% of shareholders and not engage in more dubious tactics. If the Severstal deal is better than a takeover by Mittal, Arcelor shouldn t fear a vote. But it will need to make a stronger case.

Abramovich’s Evraz move won’t involve Corus – yet

31 May 2006

The oligarch s mooted purchase of a £1.7bn stake in Londonlisted Russian steel group Evraz has incited talk of a tie up with Corus. This isn t likely at least for now. Abramovich s past role in consolidating Russian industries provides a better clue to his ambitions.

Arcelor shareholders should fight for rights

30 May 2006

The steel group is effectively disenfranchising them by offering them only a bogus vote on its planned merger with Severstal. Shareholders should call an EGM to insist that the Severstal deal is put to a proper vote. They must act swiftly.

Arcelor tries to ram through E10bn Severstal deal

26 May 2006

Whether the deal is any good is another matter. The terms aren't transparent and the idea the deal values Arcelor at E44/share is fanciful. Shareholders aren't being given a fair chance to assess this deal compared to Mittal's hostile offer. This is democracy Russianstyle.