i would say this is one of the biggest blunders indians have ever made thus far ( assuming they close the deal and take corus ) in their international forays.
Not long ago Corus was valued at around 180 million pounds ( same thing now being sold for £4.5 billion pounds )...and was running loss of 500 million pounds annual....before its fortunes were turned by factors outside its control. That is the rapid development of china...sucked in excess iron from the world markets....increasing price of steal many times.......corus further improved its situation by shutting plants and cutting jobs ( by raising funds from sale of aluminum plant --now the indians wouldnot be getting aluminium plant ).
But china has turned net exporter of steal last year.....hence the prospects for iron prices doesnot look good and bad days for corus are only round the corner.
What is TATA doing? TATA is loaning 2-3 billion pounds to buy Corus.....which simply means the indians would be paying good money ( in interest payments ) back to the westerners who loaned them the money to buy corus...and they donot even have to worry about the headache of corus slipping back into loss-making....as is expected.
of the 4.5 billion price of corus.....2 billion is added purely due to market speculation in the last 6 months itself ( when the russian rumors were abound..these rumours added about 1.5 billion dollars as bid was expected..which never came....then the indian rumour started which made the share price jump further adding another 500 million pounds or so....before the indians actually came out with a price)......from this one doesnot have difficulty in concluding that corus is being sold...way over its worth. From the British and Holand shareholder's point of view this is truely win win situation...they should take the money and run!.
