Shares in Tata Steel Ltd, India's largest private sector steel-maker, fell as much as 3.6 percent to four-month lows on Monday after its offer to buy Anglo-Dutch steel-maker Corus Group Plc was topped by a rival.
Indian newspapers reported that top executives of Tata Steel were expected to meet in Mumbai after Brazil's Companhia Siderurgica Nacional (CSN) made an $8 billion counter-offer for Corus on Friday, but a Tata spokesman declined to comment. "We don't have anything to say at this point of time," he said.
Analysts said Tata Steel still had a better chance of winning the take-over even if it only matched CSN's higher bid of 475 pence per share, given Corus management had approved the Indian firm's bid.
CSN's offer tops Tata Steel's by 20 pence per share. "They (Tata Steel) will probably need to up the price," said R. Sreesankar, head of research at IL&FS Investsmart. "It is an arranged take-over of Corus, and we don't know Corus's attitude towards CSN." The Anglo-Dutch steel maker is yet to respond to the bid by the Brazilian firm, which failed in an earlier attempt to buy Corus in 2002.
In the first hour of trade on Monday, Tata Steel shares fell as much as 3.6 percent to a four-month low of Rs 459, leading the main stock index down.
The company's shares fell each day last week, even as the main index hit successive record highs, and at its early low was 11.9 percent down the high of Rs 521 on October 20, the day Corus approved Tata Steel's take-over bid. Traders said Tata Steel's stock price could remain under pressure for some time as speculators betting on a successful bid for Corus could trim their positions.
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