BlueScope Steel, formerly BHP Steel and the operator of Australia’s sole profitable integrated steel business, has reportedly rejected multiple takeover approaches from US-based Steel Dynamics. The unsolicited bids included all-cash offers, partial takeovers, and a mixed cash-and-scrip proposal focused on acquiring BlueScope’s US assets while allowing existing shareholders to retain the Australian operations. The latter was notionally valued at a 40 per cent premium to BlueScope’s prevailing share price.
BlueScope Steel is a leading international manufacturer of steel products and solutions, with a significant presence in Australia and North America. The company provides a range of steel products for building and construction, as well as for manufacturing and other industries. Despite the attractive premium offered, BlueScope’s board has consistently dismissed Steel Dynamics’ advances, citing concerns over valuation, execution and funding risks associated with the proposed transactions.
The board also expressed doubts regarding the likelihood of securing the necessary regulatory approvals for the deals to proceed. These reasons encompass a comprehensive range of standard merger and acquisition rejection justifications. All discussions and negotiations between the two companies have been conducted privately, without public disclosure until now.
The repeated rejections suggest a strong conviction within BlueScope regarding its independent future and strategic direction, despite the overtures from its US counterpart. Investors are now watching to see the next move from Steel Dynamics, or indeed if Bluescope is entertaining offers from other suitors.
