BlueScope Steel has received another takeover bid. Photo: Jen White.
BlueScope Steel has received a revised “best and final” takeover proposal from a consortium comprising SGH Limited and US-based Steel Dynamics Inc (SDI), offering $32.35 cash per share in a deal valuing the Illawarra steelmaker at about $15 billion.
The unsolicited, non-binding indicative offer would see SGH acquire 100 per cent of BlueScope’s shares, before on-selling the company’s North American operations to Steel Dynamics.
SGH would then retain BlueScope’s Australian steelmaking and global operations outside North America, positioning itself as the long-term steward of the domestic business.
BlueScope confirmed the new approach to the ASX, saying its board — supported by management and advisers — was “considering and evaluating the proposal”.
“As part of its evaluation, the board of BlueScope will consider the proposal relative to the fundamental value of the company, along with the conditionality and executability of the proposal,” the company said in a statement.
It said the board previously unanimously rejected an earlier offer from the same consortium in January, stating it “very significantly undervalued” the company.
That proposal was for the group to acquire all shares in the company at $30 cash per share.
BlueScope said there was no certainty the revised proposal would result in a transaction and shareholders were not required to take any action at this stage.
“Consistent with BlueScope’s half year results release, the board is committed to optimising value for its shareholders across all of its businesses and continues to regularly assess all options to accelerate realisation of this value,” it said.
In a joint statement, SGH and SDI said the latest bid of $32.35 per share equated to $34.00 per share before deductions of BlueScope’s recently announced $1.00 unfranked special dividend and $0.65 unfranked interim dividend.
It described the proposal as a “compelling value proposition”.
“The increased purchase price represents SGH and SDI’s best and final offer in the absence of a superior competing proposal for all or a material part of BSL,” it said.
The consortium said the offer implied a 47 per cent premium to BlueScope’s adjusted closing share price at the time of its initial proposal, a 56 per cent premium to the company’s 52-week volume-weighted average price and a 32 per cent premium to its 15-year high share price.
SGH said the acquisition aligned with its capital allocation strategy and would allow it to apply its operating model to support performance improvements across BlueScope’s Australia-focused portfolio.
For Steel Dynamics, one of the largest steel producers in the US, the deal would deliver BlueScope’s North American operations, complementing its existing steel production, coating, metals recycling and building products platforms.
The proposal remains subject to customary conditions, including satisfactory due diligence, agreement on a binding scheme implementation deed and shareholder and regulatory approvals.
SGH and SDI said they did not believe there were material obstacles to securing the necessary regulatory clearances.
BlueScope said it would continue to keep the market informed in line with its continuous disclosure obligations.
