Australia’s BlueScope Steel (ASX: BSL) said Monday it will likely reject an A$13.2 billion (US$8.8 billion) takeover proposal from a consortium led by Kerry Stokes-backed SGH (ASX: SGH) and U.S.-based Steel Dynamics (Nasdaq: STLD).
The proposal, submitted on Dec. 12, valued BlueScope at A$30 a share, a near 27% premium to its closing price the previous day and about 25% above where the stock was trading on Monday. However, the country’s largest steelmaker said the offer doesn’t adequately reflect its value or future prospects.
BlueScope operates the Port Kembla steelworks in Wollongong and runs five businesses in North America, a footprint that has previously been viewed as a buffer against U.S. tariffs because the company ships limited steel from Australia into the country.
Weaker demand and a significant writedown in its U.S. metal coatings business, however, weighed on BlueScope’s expected fiscal 2025 earnings, denting investor confidence.
Billionaire Stokes is chairman and controlling shareholder of SGH, which he built into one of Australia’s largest industrial conglomerates. Steel Dynamics is one of America’s biggest and most profitable steel producers.
Earlier offers
BlueScope also disclosed for the first time that it rejected three earlier unsolicited approaches, including two Steel Dynamics-led bids in late 2024 at A$27.50 and A$29 a share.
Those earlier proposals would have resulted in Steel Dynamics acquiring BlueScope’s North American operations. A third approach in early 2025 sought to buy the entire company, retain the North American business and distribute the remaining assets to shareholders, valuing the North American operations at A$24 a share and other assets at no less than A$9 a share.
“These approaches were rejected as they significantly undervalued BlueScope and its future prospects, and presented significant execution risk in relation to regulatory outcomes,” the company said Monday.
Sector pressure
The latest proposal comes as the global steel sector adjusts to U.S. President Donald Trump’s 50% tariff on steel imports, imposed on national security grounds to protect domestic production. BlueScope operates almost 100 sites across Australia, with its local business generating A$6.95 billion in sales in the last financial year.
The company has also partnered with Asian steelmakers, including Japan’s Nippon Steel and Korea’s Posco, to explore a potential acquisition of the Whyalla steelworks in South Australia, formerly owned by British businessman Sanjeev Gupta.
Be the first to comment on "BlueScope plays down $8.8B takeover bid"