The Hindu Business Line : Corus: What's in store?

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Mumbai/London Jan 30 The Indian corporate world watched with bated breath as Tata Steel and Brazil's CSN entered the final lap of the race for Anglo-Dutch steel maker Corus, heading for a closed-door auction in London late Tuesday.

It is a new experience for India, as it is arguably the first time in its history that a home grown corporate is participating in this kind of auction for a global takeover.

At the time of going to press, half-an-hour before the high-profile auction, neither of the two suitors had submitted a revised offer, as was expected in certain quarters.

Both the companies, instead, got prepared to battle it out at the closed-door nine-round auction.

Suspense was also palpable at the Corus headquarters in London, as well as at the auction venue. The suspense was accentuated by the secrecy that shrouded the strategies finalised by both the companies for the bidding battle.

For, it was not just the Tata top-brass or their Brazilian competitors CSN who played their cards close to the chest while bidding for Corus. Lawyers and industry representatives involved with the final lunge to the finish line were equally tight-lipped.

Pointing out that the deal was poised sensitively, a solicitor familiar with the case told Business Line that the auction procedure varied depending on what the clients wanted.

Indicating that it would not be an auction in the traditional sense of the term, a spokesperson for the Tatas in London said that the auction process could combine both online and physical transactions, as was seen the last two times a similar auction had been conducted in the UK.

The parties involved could be at different locations and the transaction could be online or the auction could be held at a `remote' location, he said, unwilling to divulge details.

The auction method to end long-drawn bidding dramas for companies was introduced by the UK's regulatory Takeover Panel in 2002. It has since been used in two cases, in the bid for property group Canary Wharf in 2004 and when online auction firm QXL Ricardo went under the hammer in 2005.

The auction process is expected to last for about ten hours and comprise nine bidding rounds and a result is anticipated at around 0300 GMT on Wednesday morning (8.30 am IST).

Corus is Europe's second-largest steel maker and the world's ninth-largest, producing around 18 million tonnes per year.

More Stories on : Steel | Mergers & Acquisitions | Tata Steel Ltd

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