Tata wins Corus in midnight shootout

Back in April 2003, you could have snapped up Corus shares for just 8p. But last week the Anglo-Dutch steelmaker was being fought over for much higher stakes - Corus found itself centre stage as two rival bids dug into their pockets until the offer price reached 608p.

That was when Brazilian steelmaker CSN blinked - the result being that the Indian bidder Tata carried off the spoils.

What a transformation in value. Okay, there has been a five-to-one share consolidation in the mean time, so that earlier 8p figure translates to 40p at today's values, but even so, the latest figure - which values Corus at more than £6bn - marks a remarkable resurgence of a business that had so recently been on its knees.

And it is not all that often that share price developments get as exciting as this.

In the case of Corus, the London Stock Exchange's Takeover Panel stepped in with a two-way auction. The solution was seen as the only way out of what had become a stalemate.

Things had started well back in October when Tata first stepped in with a bid of 455p a share. Corus liked it. Chief executive Philippe Varin and his board advised Corus shareholders to accept.

But next came CSN with more, and in two shakes the best offer on the table had jumped to 515p. But then torpor set in.

How high the share price might go during the auction was a fascination.

The 10-hour bidding process got underway at 4.30pm and as the clock started ticking, the Indian team settled in.

As it turned out, the first eight rounds were something of a standoff, with neither side pulling out. The clock ticked round to midnight and sealed envelopes with the final bids were handed over.

Tata had bid steadily throughout the evening, lifting its offer 5p at a time to comply with the rules. But CSN played a different game, its bids climbing in more erratic leaps, sometimes being tabled at exactly the same time as Tata's new offer.

In its final bid, CSN said it would beat Tata's bid by 5p up to a maximum of 603p. Tata did the same but its pull-out point must have been higher as it won. It shook hands at 608p. How much higher it might have gone, if pushed, is a secret.

When Varin and his management team were asked if they would donate to charity the difference between 455p and 608p, they are reported to have bristled.

[Contract Journal, 7th Feburary 2007, ]