BlueScope Steel (ASX:BSL) confirmed on Wednesday that it is assessing a revised takeover proposal from a consortium made up of SGH Ltd (ASX:SGH) and Steel Dynamics (NASDAQ:STLD). The consortium's updated submission, described by BlueScope as a "best and final" approach, would place the steelmaker's enterprise at approximately A$15 billion.
Under the unsolicited, non-binding and conditional proposal, SGH would acquire all BlueScope shares for A$32.35 in cash per share. The plan set out in the proposal would then see SGH on-sell BlueScope's North American businesses to Steel Dynamics, according to a BlueScope statement.
Market reaction followed the announcement. BlueScope shares rose as much as 6 percent, reaching A$29.67 by 00:14 GMT on the news.
The revised approach comes after BlueScope's board last month unanimously rejected an earlier offer from the same consortium. That prior proposal put a cash price of A$30.00 per share on the table and was turned down on the grounds that it "very significantly undervalued" BlueScope.
BlueScope's board said it, together with management and its advisers, will evaluate the latest proposal against the company's fundamental value and will weigh deal certainty and execution risks. The company emphasized there is no guarantee the new approach will result in a transaction and advised shareholders that they do not need to take any action at this time.
Context and implications
The proposal structure would see SGH act as the initial cash acquirer of BlueScope shares and subsequently divest the North American operations to Steel Dynamics. BlueScope has described the consortium's submission as unsolicited, non-binding and conditional, and the board has reiterated that it is scrutinizing the offer in light of valuation and execution considerations.
The company reiterated that there is no certainty the approach will lead to a completed transaction and that shareholders should refrain from taking action while the board and advisers continue their assessment.