MUMBAI: It appears to be a replay of the bidding war which took place in the winter of 2006, when Tata Steel had to battle a global rival's challenge to protect its interest on a foreign asset.
Four years ago when Tata Steel made a $7.6-billion takeover bid for Corus, it faced a challenge from Brazil's CSN. What followed was a protracted battle to buy out the British steel company, resulting in Tata Steel's victory on a final price of $13 billion.
The story is now being played out at Riversdale Mining, in which Tata Steel is the largest shareholder with a 24% stake. The Australian company has received a tentative $3.5-billion takeover offer from global miner Rio Tinto, which opens up a fresh challenge for the Indian steel giant to guard its turf. The other significant shareholders of the Australian stock exchange-listed Riversdale are CSN with a 16% stake and Passport Capital with a 17% holding.
Though Tata Steel, the world's seventh largest steel company, is keeping its cards close to the chest, sources said that the company doesn't rule out making an open offer for Riversdale Mining, which has assets in Africa.
In a statement, Tata Steel said, "Tata Steel views Riversdale Mining as a valuable strategic investment and continues to be interested in developing the tenements of the company. Tata Steel will continue to monitor the situation and will take appropriate action as deemed necessary."
Following the Rio Tinto development , shares of Tata Steel, part of the $72-billion Tata Group, jumped during trade hours on Monday and finally closed at Rs 635, up Rs 21 on Bombay Stock Exchange.
For Tata Steel, its interest in Riversdale is crucial to secure raw materials for its European steel operations, Corus . Tata Steel has been investing in coal and iron ore projects—key raw materials to make steel—in Africa, Australia and Canada.
Read more: Tatas face Rio challenge for Oz co - The Times of India http://timesofindia.indiatimes.com/business/india-business/Tatas-face-Rio-challenge-for-Oz-co/articleshow/7056932.cms#ixzz17PGwqELV
Four years ago when Tata Steel made a $7.6-billion takeover bid for Corus, it faced a challenge from Brazil's CSN. What followed was a protracted battle to buy out the British steel company, resulting in Tata Steel's victory on a final price of $13 billion.
The story is now being played out at Riversdale Mining, in which Tata Steel is the largest shareholder with a 24% stake. The Australian company has received a tentative $3.5-billion takeover offer from global miner Rio Tinto, which opens up a fresh challenge for the Indian steel giant to guard its turf. The other significant shareholders of the Australian stock exchange-listed Riversdale are CSN with a 16% stake and Passport Capital with a 17% holding.
Though Tata Steel, the world's seventh largest steel company, is keeping its cards close to the chest, sources said that the company doesn't rule out making an open offer for Riversdale Mining, which has assets in Africa.
In a statement, Tata Steel said, "Tata Steel views Riversdale Mining as a valuable strategic investment and continues to be interested in developing the tenements of the company. Tata Steel will continue to monitor the situation and will take appropriate action as deemed necessary."
Following the Rio Tinto development , shares of Tata Steel, part of the $72-billion Tata Group, jumped during trade hours on Monday and finally closed at Rs 635, up Rs 21 on Bombay Stock Exchange.
For Tata Steel, its interest in Riversdale is crucial to secure raw materials for its European steel operations, Corus . Tata Steel has been investing in coal and iron ore projects—key raw materials to make steel—in Africa, Australia and Canada.
Read more: Tatas face Rio challenge for Oz co - The Times of India http://timesofindia.indiatimes.com/business/india-business/Tatas-face-Rio-challenge-for-Oz-co/articleshow/7056932.cms#ixzz17PGwqELV
No comments:
Post a Comment