This morning (6th Jan), SGH Limited (SGH AU) and Steel Dynamics (STLD US) (SDI) confirmed they have submitted an NBIO for Bluescope Steel (BSL AU), Australia’s largest steel manufacturer.
The Kerry Stokes-backed SGH and SDI are offering A$30/share, a 27% premium to undisturbed. And ~18.6x and 9.5x FY25 EV/EBIT and FY25 EV/EBITDA.
Regulatory clearance should include FIRB and (perhaps) ACCC. SGH’s entrance should smooth over these conditions.
The Trade:
Terms are below last year’s indicative Offer from SDI - which was rejected.
SDI has now tabled four Offers; but this one has SGH in its corner to satisfy reg approvals. A sticking point in prior NBIOs.
This NBIO needs a decent bump - >10% - for Bluescope to engage.
BlueScope has zero net debt. By all accounts, its USA ops are undervalued.
Trading 3.4% adrift of indicative terms.
I would not aggressively chase it here.