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Tuesday 02nd of December 2008
December 11, 2006

Bidding war for Corus Steel in prospect


by Elaine Frei

The FTSE Eurofirst 300 was up on Monday on gains in the steel sector as it seemed that there could be a bidding war for Anglo-Dutch steel maker Corus that could translate into wider consolidation in the sector. The Eurofirst was up 0.6 percent to 1,457.09.

The steel sector was not the only one that gained on bids and rumors of bids, however. Among stock exchanges, Deutsche Borse was 3.1 percent higher to €137.10 on a meager hope that Euronext’s tie-up with NYSE Group might not be as firmly settled as had been thought, making room for a bid from the German exchange operator. Euronext added 2.9 percent on the session ahead of a December 19 vote by shareholders on the merger with NYSE.

Bids rumors also helped Continental after General Capital Group would not rule out another bid after a failed attempt to buy the German tire maker earlier in the year. Continental was up 2.6 percent to €89. 69.

With prospects shaping up for a bidding war between CSN of Brazil and Tata of India, Corus added 5.4 percent to €7.80 as analysts said that while the Tata bid is more favorable from an employee point of view, Corus is obligated to act in the interests of its shareholders, who would benefit more from acceptance of the CSN bid. CSN is currently offering 515p per share, while Tata’s bid stands at 500p per share, raised on Sunday from a previous 455p bid. In Mumbai, Tata dropped 6 percent on the increased bid.

Elsewhere in the sector, ThyssenKrupp gained 1.5 percent to €32.13 after its target share price was revised upward by Goldman Sachs. Salzgitter was 1.6 percent higher to €97.22, Mittal Steel added 2.5 percent to €32.80, and Acerinox of Spain was up 2.7 percent to €21.77.

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