Is Corus safely in Tatas' bag?

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS Tata Corus Deal: Sign of a Confident Indian Inc Corus has agreed to £4.3bn (US$8bn) takeover by Tata Steel Will the Tata-Corus deal go through? Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Is Corus safely in Tatas' bag, or could this takeover battle also be a prolonged one as in the case of Mittal and Arcelor? There have been talks of counter bids for Corus from players like Severstal and CSN. CNBC-TV18 reports on how these companies stack up.

 

Counter bids have come from companies like CSN, ThyssenKrupp, Evraz and Severstal. The two most likely contenders are CSN and Severstal.

 

Taking a look at these two, Severstal has got its focus on high value-added products in attractive niche markets. Its EBITDA margins are at 26%. It has a debt of USD 1.79 billion and its debt-equity ratio is at 0.23:1.

 

It is also planning an IPO of up to USD 1.7 billion by listing up to 15% of shares in London. The company plans to use the proceeds of the IPO to reduce its debt and strengthen its balance sheet.

 

Taking a look at CSN, it is the second largest integrated steel company in Brazil and Latin America. It has a capacity of 5.8 mt of crude steel and it is self-sufficient in iron ore and mixing ores.

 

The company has a 42% stake in CVRD, the largest global producer and supplier of iron ore. It is concentrating on projects related to the Casa de Pedra mine. Its debt stands at USD 4.1 billion and it has a debt-equity ratio of 0.7:1.

 

These two companies have refused to comment and have not said whether they are likely to make a deal, so one will have to just wait and watch.