Brazilian steel company CSN is prepared to counter a revised bid for Corus from Indian group Tata, according to City sources.
Corus shares rose steeply on Friday in expectation of an increased offer from Tata to top CSN's 515p offer, which values Corus at £4.9bn. At one point, shares in Corus, formed in 1999 from the merger of British Steel with Dutch maker Hoogovens, rose above 550p – a seven-year high – before closing at 549p.
There has been frenzied speculation over a fresh Tata approach following a dramatic bidding war in the autumn.
Tata initially offered 455p in October before CSN countered with a higher bid. In December Tata came back at 500p only to be trumped hours later by CSN chairman Benjamin Steinbruch.
Some analysts point to a 530p Tata approach to improve on CSN's current bid. However, others suggest that 530p would not be a 'knockout' blow, and that Steinbruch would come back with a yet higher offer. One said CSN had secured debt facilities with its bankers that would allow it to raise its bid further: 'It's clear where the market thinks this might end up – around 550p.'
Under a timetable set out by the Takeover Panel, Tata has until the end of the month to make a revised bid.