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November 29, 2005

CANADA: Competing bid made for steel maker

German steel maker ThyssenKrupp has made a friendly offer to acquire Canadian steel company Dofasco for US$4.1 bn, trumping an offer from Luxembourg's Arcelor.

German steel maker ThyssenKrupp has made a friendly offer to acquire Canadian steel company Dofasco for US$4.1 bn, trumping an offer from Luxembourg’s Arcelor .

The Associated Press (AP) said the bid was for 61.50 Canadian dollars ($52.59) per share, 9.8% higher than the bid made by Arcelor .

Dofasco’s board reportedly recommended that its shareholders accept the offer from ThyssenKrupp , a quick acknowledgment that it preferred the German suitor to its Luxembourg-based rival.

AP noted that Arcelor had made a hostile offer last week of CDN$4.4bn (US$3.7bn) for Hamilton, Ontario-based Dofasco, its first foray into North America and a shift from its previous strategy of making acquisitions in developing markets.

Dofasco – Canada’s largest steel company – reportedly said at the time it would review the offer, and urged shareholders to await its recommendation before selling. Arcelor ‘s all-cash bid represented a 27.3% premium over the 44 Canadian dollars ($37) closing price of Dofasco’s shares on 22 November, AP added.

ThyssenKrupp ‘s bid is a 40% premium over its closing price on the Toronto Stock Exchange on the same day, The Associated Press noted.

Arcelor reportedly said it was reviewing ThyssenKrupp ‘s offer.

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