Tata Steel Loses Vietnam Takeover Bid

Mumbai: Tata Steel has lost the bidding battle for Vietnam''s Vinausteel and SSE Steel after missing a vote on the resolution for its sale and purchase pact by Vietnam Industrial Investments (VII), the parent company of the two steel makers. VII informed the Australian Securities Exchange the company is listed on the Australian stock exchange that the resolution on the sale and purchase agreement was lost on a poll vote by shareholders at its annual meeting on June 29. Tata Steel''s Singapore subsidiary NatSteel was to acquire 100 per cent in SSE Steel and 70 per cent in Vinausteel. SSE Steel has a capacity of 250,000 tonnes of bar and wire rods and Vinausteel produces 180,000 tonnes of reinforcing bars.

The deal ran into problems when Prudential Vietnam Securities Investment Fund Management Company and VII Managing Director Henry Lam Van Hung, who holds 10.46 per cent, made unsolicited cash acquisition offer. Prudential''s offer of $13.3 million was 10.65 per cent higher than NatSteel''s. With the vote rejecting NatSteel''s offer, VII''s independent directors will propose an amended offer for $17.6 million from Prudential.This runs contrary to NatSteel''s contention that not completing the sale and purchase agreement would be a breach of contract. The main advantages of Prudential''s offer were that it would give cash directly to shareholders and that the offer price was at a significant premium to VII''s historic trading prices. Tata Steel was successful in the first for Anglo-Dutch steelmaker Corus after it outbid rival suitor CSN of Brazil.