By Scott Murdoch
Feb 26 (Reuters) - Australia's BlueScope Steel's shares dropped almost 5% on Thursday after it said a A$15 billion ($10.7 billion) revised bid from the SGH and U.S.-based Steel Dynamics consortium was still not enough to seal its approval.
However, BlueScope's board said it remains open to engaging with the consortium on a bid that reflects "the fair value of BlueScope", compared with the revised A$34 per share offer.
The value of the bid is reduced to A$32.35, following a A$1 special
dividend declared in January and BlueScope's A$0.65 per share interim dividend. BlueScope has said it intends to distribute a further A$1.35 per share to investors in 2026.
"The offer price is not sufficient for the board to recommend a scheme of arrangement to its shareholders," the takeover target said, adding that there are ways to increase the value for shareholders.
BlueScope shares fell as much as 4.9% on Thursday, before recovering some ground to be trading down 2.6%. The S&P/ASX200 was 0.4% higher.
SGH declined to comment on BlueScope's statement. Steel Dynamics did not immediately respond to Reuters' request for comment.
A letter sent to SGH and Steel Dynamics from BlueScope chair Jane McAloon, published on the ASX, said the steel producer was willing to engage with the consortium if certain conditions were met.
McAloon said BlueScope needed to better understand the valuation that would be put on the company's North American assets given that business would be sold to Steel Dynamics as part of the process.
She added BlueScope was not willing to meet the consortium's proposal the board needed to recommend the offer to investors before SGH and Steel Dynamics carried out due diligence on its target. The letter also asked for more details on the funding structure that would be used in the takeover.
"If you are able to address the matters we have raised in this letter including, importantly, increasing the value of your proposal for all BlueScope shareholders, the board is open to further engagement with you, including providing some due diligence information," McAloon said.
($1 = 1.4037 Australian dollars)
(Reporting by Scott Murdoch in Sydney and Sneha Kumar in Bengaluru; Editing by Alan Barona and Stephen Coates)
