Company rejects $13b takeover bid from Kerry Stokes and Steel Dynamics
Billionaire Kerry Stokes’ business conglomerate SGH Limited and its bidding partner, US steelmaker Steel Dynamics, will have to tone down their $13 billion bid for Australia’s biggest steelmaker to succeed, after the target’s board rejected the bid as “highly opportunistic”.
According to the pair’s indicative offer, the value of dividends paid to BlueScope shareholders will be excluded from the offer until the deal closes. This means the actual purchase price shareholders will receive will be below the $30 per share offer, given the time required to complete such a large transaction, BlueScope told the ASX last night.
“Let me be clear: this offer was an attempt to buy BlueScope cheaply from its shareholders,” BlueScope president Jane McAloon said in a statement. “He has greatly underestimated our world-class assets, our growth momentum and our future, and the board will not allow it.”
BlueScope rejected the consortium’s $13 billion takeover offer, saying its business was undervalued.Credit: James Davies
Suitors approached BlueScope in mid-December with an offer to purchase all of its shares for $30 per share in cash and then split the company; SGH acquired all shares of BlueScope and then sold its North American businesses to Indiana-based Steel Dynamics. BlueScope’s shares rose more than 20 percent to $29.48 on Tuesday after the offering was made public.
The steelmaker said the takeover deal was subject to conditions such as bidders gaining exclusive access to BlueScope’s books and providing significant debt financing.
The Australian steel giant had already rejected three previous takeover approaches involving Steel Dynamics since late 2024, with the US steelmaker eyeing BlueScope’s North American operations.
“This is the fourth time we’ve said no, and the answer remains the same; BlueScope is worth much more than what’s on the table,” McAloon said.
He said the offer came at a time when steel prices were falling in Asia. He argued that if prices rebounded and exchange rates returned to historic levels, this would boost earnings by $400 million to $900 million a year over last year’s result.
Under the latest takeover approach, Stokes’ business conglomerate will add to its business the domestic and Asia-Pacific operations of Caterpillar dealer WesTrac, industrial equipment rental company Coates, construction products manufacturer Boral, as well as gas exploration company Beach and BlueScope, part of television and broadcast group Seven West Media. 50.9 percent of the company belongs to the Stokes family, and the general manager of the company is Kerry’s son, Ryan Stokes.
