Two major steel companies have sweetened their takeover attempt for Australian steelmaker BlueScope Steel, raising their offer to A$15 billion ($10.6 billion) in what they’re calling their final bid.
SGH Ltd, owned by media mogul Kerry Stokes, and Indiana-based Steel Dynamics announced they would pay A$32.35 per share in cash for BlueScope. The companies described this as their “best and final” proposal unless a competing offer surfaces for the steel manufacturer.
This enhanced bid represents an 8% increase from their earlier A$30 per share proposal, which BlueScope’s board turned down last month for “undervaluing” the company. When factoring in recently announced dividends, the total offer reaches A$34 per share.
BlueScope responded that its board would evaluate the proposal. “The board of BlueScope will consider the proposal relative to the fundamental value of the Company, along with the conditionality and executability of the proposal,” the Melbourne-based steelmaker stated.
Following the announcement, BlueScope shares surged up to 6% during early trading, reaching A$29.67 per share, though they remained below the previous rejected offer price. The stock later pulled back to approximately A$28.825.
Market analysts at RBC expressed skepticism about the bid’s success. “We do not expect that a +13% increase is sufficient to bridge the prior gap to the Board’s view of fundamental value,” they wrote, referencing the latest offer including dividends.
The analysts added: “Our mid-cycle implied value is in the mid-A$30 a share range, and that an offer will need to be at least at this level to be successful.”
AustralianSuper, which holds the largest stake in BlueScope at 13.52%, chose not to comment on the revised offer. The pension fund had previously supported BlueScope’s rejection of the initial bid, stating it “very significantly undervalued” the company.
The acquiring companies plan to divide BlueScope’s operations geographically if successful. SGH would acquire the Australian business operations, while Steel Dynamics would take control of the North American division.
Steel Dynamics operates facilities approximately 90 kilometers from BlueScope’s Ohio plant, making the geographic split strategically logical for both buyers.
This takeover attempt, initially launched in December, represents Steel Dynamics’ latest effort to acquire Australia’s biggest steel producer. The move occurs as the steel industry navigates challenges from U.S. President Donald Trump’s import tariffs on steel products.
BlueScope recently announced strong financial results, declaring an interim dividend of 65 Australian cents per share after reporting better-than-expected first-half earnings and solid second-half performance. The company also issued a special dividend of A$1 per share last month.
