Investors in BlueScope Steel Ltd., Australia’s largest steelmaker, are pushing for a higher takeover price after a US$8.9 billion (A$13.2 billion) acquisition proposal was put on the table by a consortium comprising Australia’s SGH Ltd. and U.S.-based Steel Dynamics Inc. The bid, which equates to A$30 in cash per share, has drawn backing from the market but is now seen by some shareholders as insufficient to secure broad support.
Under the terms of the proposal, SGH, a diversified Australian group controlled by billionaire Kerry Stokes would acquire all of BlueScope’s shares and subsequently divest the company’s North American operations to Steel Dynamics. The structure, designed to split the business along geographic lines, reflects the consortium’s strategic view on asset value.
BlueScope’s shares have traded close to the offer price, closing slightly higher in recent sessions, which suggests the market has priced in the possibility of a transaction. However, several prominent investors have indicated that A$30 per share may undervalue the company, especially given its long-term prospects and asset base.
Investors such as Jamie Hannah, deputy head of investments at VanEck, said while interest in BlueScope is positive, the current valuation does not fully reflect the steelmaker’s underlying worth. Others, including portfolio managers at firms like Blackwattle Investment Partners, echoed the view that the offer would likely need to rise “north of A$30” to attract meaningful support from shareholders.
AustralianSuper, BlueScope’s largest shareholder with around a 12.5 per cent stake, has not publicly commented on the bid. Its backing could prove crucial, given that large pension funds in Australia often play a key role in determining outcomes in major corporate transactions.
BlueScope’s board has not yet issued an official recommendation on the proposal. This is the fourth formal approach the company has received from Steel Dynamics-linked groups since late 2024, following earlier bids that were also dismissed as undervaluing the business.
SGH and Steel Dynamics have indicated that the all-cash offer is intended to deliver “immediate and certain value” to shareholders, highlighting the premium relative to recent trading levels. Whether the consortium will revise its offer to secure broader investor support remains a key question as discussions continue.
