By Scott Murdoch and Christine Chen
SYDNEY, Jan 7 (Reuters) - BlueScope Steel investors said they are hoping a A$13.2 billion ($8.92 billion) buyout bid for the company from SGH and U.S.-based Steel Dynamics
will be raised to win their backing to sell Australia's largest steelmaker.
BlueScope shares closed 1.12% higher on Wednesday at A$29.87, fractionally below the A$30 per share offer made public on Monday.
The BlueScope board has yet to deliver an official recommendation on the all-cash bid, which was the fourth approach from Steel Dynamics put to the Melbourne-headquartered firm since late 2024.
Under the terms of the deal, SGH, controlled by Australian billionaire Kerry Stokes, would buy BlueScope and then offload the steelmaker's North American assets to Steel Dynamics.
While BlueScope shares trading close to the offer price imply the market expects the deal to proceed, some investors say the price needs to be lifted to secure their support.
"It's good that there's some interest in BlueScope, the underlying thought from us and looking at the valuations is it's not enough," said Jamie Hannah, deputy head of investments at VanEck, a BlueScope and SGH investor.
"I think the way everything's going, they're going to have to increase the offer if they want to get any of the shareholders over the line."
AustralianSuper, BlueScope's largest investor with a 12.5% stake, declined to comment. Its backing could be vital for the bid to proceed, as Australian pension funds often play an active role in corporate transactions.
AustralianSuper scuttled Brookfield's $10.6 billion bid for Origin Energy in 2023 after it said the offer undervalued the Australian energy firm.
BlueScope, SGH and Steel Dynamics did not respond to requests for comment.
"It's definitely a good start ... but we think in terms of full value, probably think they should be slightly north of A$30," said Joseph Koh, portfolio manager at Blackwattle Investment Partners, which owns BlueScope and SGH stock.
Macquarie analysts said in a research note that they sensed investors viewed the price as low but the deal prospect was real.
"(A) shift in terms, and economics, thus seem likely as time passes," they said.
($1 = 1.4795 Australian dollars)
(Reporting by Scott Murdoch and Christine Chen; Editing by Jamie Freed)
