The board of BlueScope said it has unanimously rejected an unsolicited, non-binding and conditional takeover approach from a consortium comprising SGH Limited and Steel Dynamics.
The proposal sought to acquire all BlueScope shares via a scheme of arrangement at AUD 30.00 (USD 20) per share, less the value of any future dividends. The board concluded that, given the time required to complete a transaction and the proposal’s conditions, including exclusive due diligence and significant debt financing, the effective value to shareholders would be lower, with potential upside accruing primarily to the bidders.
In assessing the approach, the board determined that it materially undervalued BlueScope, particularly in light of its asset base, growth trajectory and medium-term earnings potential. The proposal was also viewed as insufficiently reflecting expected value from ongoing initiatives, including accelerating free cash generation as major capital projects conclude, targeted earnings uplift from growth investments, cost and productivity improvements, and the monetization of a substantial land portfolio.
The board further noted that the proposal did not appropriately account for synergies available to the consortium and relied on leverage, despite BlueScope’s low net debt position.
BlueScope operates as a flat steel producer serving Australia, New Zealand and the US, with annual crude steel capacity of around 3 mln tons, producing slab, HRC, plate and coated steel products.
1 USD / 1.49 AUD
