WINSOME

Calcutta, Jan. 31: Companhia Siderurgica Nacional (CSN) and its shareholders are making money even though the company was knocked out of the race for Corus.

While the company will gain by selling its shareholding in Corus to the Tatas and a break fee, shareholders today made an instant gain on the bourses.

CSN shares rose 5.3 per cent on Sao Paulo’s Bovespa exchange to 64.96 Brazilian reals ($30.93) after Tata Steel announced it had outbid CSN to take over Corus Group Plc for $11.3 billion. On the other hand, CSN will take home £207 million ($405) by selling its holding to the Tatas.

While making its ‘approach’ for Corus on November 17, CSN had scooped up a 3.8 per cent stake in Corus. The Corus stock was then hovering between 450 pence and 475 pence a share.

CSN now holds a 3.6 per cent stake or 34 million shares in the Anglo-Dutch steel maker. The company will tender them in the Tata offer of 608 pence.

It could not be ascertained what was the net gain CSN made. A questionnaire sent to the company seeking the information on average cost of acquisition per Corus share remained unanswered.

The stock market rally was fuelled by investors who though that the Corus deal would saddle the company with a crushing debt burden.

In recent days, investors were betting on CSN losing the auction, but had sent CSN shares down in January over concerns that the combined CSN-Corus would have a debt of $14.5 billion (11.2 billion euro).

Along with CSN and its shareholders, CSN associates like Goldman Sachs, UBS AG and Barclays are also making good gains.

The only company that voiced against the first Tata offer of 455 pence, Standard Life Investment (SLI), is also happy with the outcome of today’s development.

“We would like to thank the Corus management and employees, particularly Phillippe Varin, for delivering the recovery that made this bid possible. Tata has now paid a fair price. We are happy with the outcome,” David Cummings, SLI head of UK equities, said in a statement.