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BlueScope's revised $10.7 billion bid is not enough but they are willing to negotiate with buyers

BlueScope Steel shares in Australia fell almost 5% on Thursday, after the company said that a re-evaluated A$15 billion bid ($10.7billion) from SGH and U.S. based Steel Dynamics was not enough to win its approval.

BlueScope said that it "remains" open to engaging with consortium in order to come up with a bid which reflects the "fair value of BlueScope", as opposed the the revised A$34 offer per share. After a $1 special dividend announced in January, and BlueScope’s A$0.65 interim dividend per share, the value of this bid has been reduced to A$32.35. BlueScope said that it plans to distribute an additional A$1.35 to investors per share in 2026.

The takeover target stated that "the?offer is not enough for the board of directors to recommend a scheme to its'shareholders" and added that there were ways to increase value for shareholders. BlueScope's shares dropped as much as 4.9% on Thursday before regaining some ground and trading at a loss of 2.6%. The?S&P/ASX200 rose 0.4%. SGH refused to comment on BlueScope’s statement. Steel Dynamics didn't immediately respond to the request for comment. BlueScope Chair Jane McAloon's letter to SGH and Steel Dynamics, which was published on ASX, stated that the steel producer would be willing to work with the consortium, if certain conditions are met.

McAloon stated that BlueScope needs to better understand the value that will be placed on the company's North American business assets, given that the business would be sold by Steel Dynamics as part of the process.

She said that while BlueScope did not want to accept the consortium's proposal, the board needed to make the offer before SGH or Steel Dynamics could do due diligence on their target. The letter also requested more information on the funding structure to be used for the takeover.

McAloon stated that the board was open to further engagement if you were able to address all the issues raised in the letter, and, most importantly, increase the value of your proposal to BlueScope's shareholders.

(source: Reuters)