It bought 19.99 crore shares, accounting for 21.1% of Corus equity, spending as much as £1.2 billion, or about Rs 10,500 crore.
MUMBAI: Tata Steel UK Ltd, the indirectly held wholly owned subsidiary of Tata Steel, rushed to mop up huge quantities of Corus Group Plc shares from institutional investors in London, hours after winning the company on Wednesday. It bought 19.99 crore shares, accounting for 21.1% of Corus equity, spending as much as £1.2 billion, or about Rs 10,500 crore.
In doing so, the Tatas have indicated they don’t want to leave anything to mischief or chance, and would like to see the back of the hedge funds by closing the issue as quickly as possible, said investment bankers.
Investors such as pension fund Standard Life had waited for a sweetened offer to exit. It finally sold its 7.5% stake as Tatas upped their October 5, 2006, offer by 33%.
Meanwhile, Standard Chartered bank has gone on record on CNBC-TV18 saying it will extend $3.5 billion to Tata Steel UK, to finance the acquisition.
The sale is significant as the pension fund earlier declined to sell its holding when Tatas made their initial offer of 455 pence.
For CSN CEO Benjamin Steinbruch, there was some consolation. The Brazilian steel maker would pocket over half a billion dollars for losing to Tatas. CSN will receive $400 million by selling over 3.4 crore shares of Corus (3.1% stake) in its possession.
CSN is also entitled to receive about $120 million from the Anglo-Dutch steelmaker on the basis of its offer having being once approved by the Corus board. Having waged a dogged battle, CSN, in the end, were a good sport. Not only have they decided to sell their 3.1% holding, the CSN chief has also made a gracious statement acknowledging the Tatas and wishing them well.
“We congratulate the Tata Group for its acquisition and we are confident that the steel industry’s consolidation process is just starting. Therefore, there will be new and better growth opportunities for CSN in the future, to which we will always be prepared,” Steinbruch said. “Concerning Corus auction, obviously, we would have preferred a different outcome. However, we decided not to exceed our pre-established limits of investment and indebtedness. Beyond such limits, we would not be assuring the adequate return rates to our shareholders,” CSN CEO said in a statement.
Corus shares meanwhile slipped marginally as excitement waned. The shares were quoting at 602 pence at close.
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