BlueScope Steel’s board said on Thursday that a revised A$15 billion (US$10.7 billion) proposal from the SGH and Steel Dynamics consortium does not meet the threshold necessary for it to recommend a takeover scheme to shareholders, though the board signaled it remains open to further engagement provided specific issues are addressed.
The consortium’s revised proposal, presented at A$34 per share, is effectively worth A$32.35 per share after accounting for a A$1 special dividend declared in January and the company’s A$0.65 per share interim dividend. BlueScope has also stated it plans to return an additional A$1.35 per share to shareholders in 2026.
In a letter published on the ASX, BlueScope chair Jane McAloon set out conditions under which the company would be willing to continue talks. McAloon said the board requires a clearer explanation of how the consortium would value BlueScope’s North American assets, noting that that business would be sold to Steel Dynamics as part of any transaction. The letter also requested further detail on the prospective funding structure for the takeover.
McAloon rejected a proposal from the bidders that the board recommend the offer to investors before SGH and Steel Dynamics conducted due diligence. The board instead made clear it expects the consortium to address its concerns, including by increasing the overall value of the proposal for all BlueScope shareholders, before the company would provide access to certain due diligence information.
"If you are able to address the matters we have raised in this letter including, importantly, increasing the value of your proposal for all BlueScope shareholders, the board is open to further engagement with you, including providing some due diligence information," McAloon wrote.
Market reaction on Thursday saw BlueScope shares slide as much as 4.9% before recovering some ground to finish the session trading down 2.6%. By contrast, the S&P/ASX200 was up 0.4% on the day. SGH declined to comment on BlueScope’s statement, and Steel Dynamics did not immediately respond to requests for comment.
The bid’s headline value is A$15 billion, reported as US$10.7 billion using the exchange rate noted in the company statement, where $1 equals 1.4037 Australian dollars. BlueScope emphasized that while the current offer price does not allow the board to back a scheme of arrangement, there are potential ways the consortium could enhance the value available to shareholders.
The board’s published correspondence frames further engagement as conditional: should SGH and Steel Dynamics satisfactorily address the valuation approach to North American assets, provide clarity on funding, and increase the monetary proposal for shareholders, BlueScope said it is willing to continue discussions and to share some due diligence materials.
Contextual note - The company’s commentary and the consortium’s revised terms remain the central facts reported here. The board has not recommended the offer to shareholders, and discussions will only proceed if the consortium meets the conditions set out in BlueScope’s letter.