BlueScope Steel (ASX: BSL) has described a $13.15 billion takeover as “cheap” offer from the Kerry Stokes-led SGH (ASX: SGH) and US-based Steel Dynamics (SDI),
In announcing a unanimous board decision to reject the unsolicited, non-binding, indicative and conditional takeover offer (NBIO), the BlueScope board told the ASX the bid failed to adequately reflect the company's value.
“Let me be clear – this proposal was an attempt to take BlueScope from its shareholders on the cheap. It drastically undervalued our world-class assets, our growth momentum, and our future – and the board will not let that happen," chairperson Jane McAloon said.
“Opportunistic takeover proposal.”
The board of Australia's leading steel producer also noted that the takeover proposal of $30.00 cash per share was less than the value of future dividends to be paid by BlueScope and accused the SGH – SDI consortium of seeking to use BlueScope’s balance sheet to help fund “their opportunistic takeover proposal.”
"This is the fourth time we've said no, and the answer remains the same – BlueScope is worth considerably more than what was on the table." Ms McAloon said.
An SGH and SDI consortium bid announcement earlier this week confirmed plans to on-sell BlueScope’s North American operations to SDI.
with SGH retaining the remaining BlueScope “Australia + Rest of World” operations.
Number of hurdles
In rejecting the offer, BlueScope also pointed out the takeover proposal was subject to a number of conditions including various board, shareholder and regulatory approvals.
In previously announcing the NBIO, SGH managing director and chief executive officer Ryan Stokes said his company was confident BlueScope’s Australian business is a strong strategic fit.
“We intend to leverage our disciplined operating model and capital allocation approach to deliver better outcomes for stakeholders," he said.
“The proposal provides BlueScope shareholders with an immediate, certain opportunity to realise a material uplift in value.”
At the time of going to press, there had been no response from SGH to the BlueScope board's decision.
