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D. Murali

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Chennai Jan. 29 It was on the night of Republic Day that we received mails from Corus, with information about the UK Takeover Panel's announcement. The three-page communiqué from The Panel on Takeovers and Mergers (www.thetakeoverpanel.org.uk) begins by chronicling the events since October 20, 2006, when Tata announced a cash offer of 455 pence per share for Corus. In December 2006, there were two further offers for Corus, a revised one from Tata at 500 pence, and the other from CSN, at 515 pence. Thereafter, the Panel announced January 30 as the date for both companies, viz. Tata and CSN to announce revised offers for Corus. Here is a quick FAQ about the situation, just when Tata and CSN are heading off to the ring...

Why is the Panel stepping in?

`To provide an orderly framework for the resolution of this competitive situation, and in accordance with Rule 32.5,' explains the Panel, since a competitive situation continues to exist.

What does Rule 32.5 say?

"If a competitive situation continues to exist in the later stages of the offer period, the Panel will normally require revised offers to be published in accordance with an auction procedure, the terms of which will be determined by the Panel," it begins, as you can read in the 254-page document on the Panel's site.

"That procedure will normally require final revisions to competing offers to be announced by the 46th day following the posting of the competing offer document but enable an offeror to revise its offer within a set period in response to any revision announced by a competing offeror on or after the 46th day." There's more: "The procedure will not normally require any revised offer to be posted before the expiry of a set period after the last revision to either offer is announced. The Panel will consider applying any alternative procedure which is agreed between competing offerors and the board of the offeree company." Please note that notes to the Rule speak of `guillotine'.

Uh?

Yes, the guillotine is explained as follows: "The Panel may impose a final time limit for announcing revisions to competing offers for the purpose of any procedure established in accordance with this Rule taking into account representations by the board of the offeree company, the revisions previously announced and the duration of the procedure."

What happens after the announcement of auction result?

After the Panel Executive announces the result of the auction procedure, each of the offerors is required to make an appropriate announcement under Rule 2.5 of the Code of a revised offer in respect of its latest bid lodged in accordance with the auction procedure.

Any changes possible to the procedure?

"The Panel Executive reserves the discretion to amend the auction procedure as appropriate. In particular, the times referred to above are subject to change, depending on the circumstances at the time," says the communiqué.

Can the rivals revise their offers?

After the conclusion of the auction procedure, neither offeror is permitted to revise the price of its offer for Corus from that established by means of the auction procedure.

Nor can the offerors introduce any new alternative offer.

The only exception to this when a third party enters the fray and announces a firm intention to make an offer for Corus.

More Stories on : Steel | Mergers & Acquisitions | Tata Steel Ltd

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