SDI, SGH submit revised final offer to acquire BlueScope Steel Ltd.

SGH Ltd. and Steel Dynamics Inc. (SDI) say they have submitted a revised nonbinding indicative offer (NBIO) to acquire BlueScope Steel Ltd., headquartered in Australia, which the board of BlueScope (BSL) says it is considering with the support of management.

The revised offer of AU$32.35 (roughly $23) per share—equivalent to AU$34 ($24) per share prior to deductions of AU$1.65 ($1.17), consisting of BSL's AU$1 per share unfranked special dividend and AU65 cents unfranked interim dividend—“represents a compelling value proposition and highly attractive premium for BSL shareholders,” according to the companies.”

SGH and SDI previously submitted an NBIO valued at AU$30 ($21) per share, which the BlueScope board rejected Jan. 7 as being less than the value of the company’s future dividend payments.

The new offer represents a total equity value for BSL of AU$15 billion ($11 billion) to be comprised entirely of cash.

The increased purchase price represents what Australia-based SGH and Fort Wayne, Indiana-based SDI say is their “best and final offer in the absence of a superior competing proposal for all or a material part of BSL.”

As previously noted, if the proposal is implemented and following the transaction close, SGH plans to sell BSL's North American operations, which include the North Star steel mill in Delta, Ohio, and a network of scrapyards operating under BlueScope Recycling and Materials, to SDI. SGH would retain the remaining BSL “Australia + Rest of World” operations.

The proposed acquisition aligns closely with SGH's stated capital allocation criteria, with an opportunity to support performance improvement through the disciplined application of the SGH operating model, according to the company. SGH says it is uniquely positioned to be the steward of BSL's Australia + Rest of World businesses as a leading Australian industrial platform with diversified operations across a range of businesses and a strong capital foundation.

The revised proposal presents a strategic opportunity for SDI shareholders and would uniquely complement SDI's steel production, coating, metals recycling and building products platforms, the steelmaker says.