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D. Murali

Auction procedure will consist of a maximum of nine rounds

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Chennai Jan. 29 Tuesday 10 p.m. IST is what corresponds to London's 4.30 pm. That's when action is to start, in the UK, with contenders for the Corus trophy battling it out in auction mode, in front of the big brother Takeover Panel, assuming that both the players, viz. Tata and CSN, decide to continue in the race.

Rules

What are the rules of the game? The auction procedure will consist of a maximum of nine rounds. This is broken into two parts. Up to eight rounds, each offeror can lodge a fixed price bid in cash.

Then, if the auction procedure has not by then concluded, a final round will take place. In this knockout phase, each offeror can lodge `either a fixed price bid in cash or a cash bid calculated by reference to a formula pursuant to which an offeror can lodge a bid at a specified amount in cash more than the other offeror subject to a specified maximum cash amount,' as the Panel explains in its announcement.

Even in the eight-round phase, `a subsequent round will only take place if the offeror, which has the lower cash bid as at the beginning of that round (or, if at that time the highest cash bids of both offerors are at the same price, either offeror) lodges an increased cash bid in that round.' The increase has to be not less than 5 pence.

Exception to the minimum increment, however, is allowed when an offeror that has the higher cash bid as at the beginning of a round lodges an increased bid in that round. Which means, there is a possibility that we may see fewer than eight rounds if either of the player loses steam.

What bids are lodged during the auction procedure are not to be publicly announced by any of the parties, insists the Panel. The procedure is given time till 2.30 a.m. on January 31, so that we may expect the announcement to come from the Panel Executive `no later than 3 am (London time)', that is, latest by Wednesday 8.30 a.m. closer home.

What if the procedure does not get over by 2.30 a.m.? The Panel would then `freeze' the auction procedure at that time, and announce by 3 a.m. `the prices of the highest cash bids (if any) lodged by each offeror at that point'. Thereafter? `The auction procedure would then be re-commenced no earlier than 4.30 p.m. (London time) on January 31 and a further announcement would be made by the Panel Executive by no later than 3 a.m. (London time) on February 1.'

Related Stories:
Corus countdown: Up to 9 bids over 10 hours if...
Four points to watch in the Corus race
The battle for Corus

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

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