Company rejects $13b takeover bid from Kerry Stokes and Steel Dynamics

Billionaire Kerry Stokes’ business conglomerate, SGH Limited, and its bidding partner, US steelmaker Steel Dynamics, will have to sweeten their $13 billion bid for Australia’s biggest steelmaker to succeed after the target’s board dismissed the offer as “highly opportunistic”.

Under the pair’s indicative proposal, the value of dividends paid out to BlueScope shareholders until the deal is settled would be taken off the offer. This meant the actual takeover price shareholders would receive would come in below the headline $30-a-share bid, given the time required to implement such a big transaction, BlueScope said in a statement to the ASX last night.

“Let me be clear – this proposal was an attempt to take BlueScope from its shareholders on the cheap,” BlueScope chair Jane McAloon said in the statement. “It drastically undervalued our world-class assets, our growth momentum, and our future – and the board will not let that happen.”

The suitors approached BlueScope in mid-December with a proposal to buy all of its stock for $30 in cash per share, and then split the company, with SGH acquiring all of BlueScope’s shares and then on-selling its North American businesses to Indiana-based Steel Dynamics. BlueScope’s shares soared more than 20 per cent to $29.48 on Tuesday after the offer was made public.

The takeover deal was dependent on conditions such as the bidders getting exclusive access to BlueScope’s books and securing significant debt financing, the steelmaker noted.

The Australian steel giant has already rebuffed three previous takeover approaches involving Steel Dynamics since late 2024 as the US steelmaker is eyeing BlueScope’s North American operations.

“This is the fourth time we’ve said no, and the answer remained the same – BlueScope is worth considerably more than what was on the table,” McAloon said the statement.

She said the offer came at a time of lower steel prices in Asia. If prices picked up again and exchange rates returned to historical levels, this would boost earnings by an additional $400 to $900 million a year from last year’s result, she argued.

Under the latest takeover approach, Stokes’ business conglomerate would add BlueScope’s local and Asia-Pacific operations to its businesses, which include Caterpillar dealer WesTrac, industrial equipment hire company Coates, building products maker Boral as well as part of gas exploration company Beach and television and publishing group Seven West Media. The company is 50.9 per cent owned by the Stokes family, with Kerry’s son Ryan Stokes running it as chief executive.