AustralianSuper backs BlueScope rejection of $13 billion takeover offer by SGH and US group Steel Dynamics

BlueScope Steel’s biggest shareholder, AustralianSuper, has backed the steelmaker’s rejection of a $13 billion takeover offer, saying the bidders need to pay “materially” more than $30 a share. With an increased 13.5 per cent of BlueScope, the retirement investment giant looms as a major impediment to the Stokes family’s SGH industrial conglomerate and US bid partner Steel Dynamics gaining full ownership of Australia’s biggest steelmaker. The two suitors want to break up BlueScope, with SGH retaining the Australian operations and Steel Dynamics taking the more profitable North American steel business. It is Steel Dynamics’ fourth tilt at BlueScope in two years. However, the BlueScope board on Wednesday rejected the new approach in partnership with SGH, dismissing it as “significantly” undervaluing the group. AustralianSuper, which manages more than $400b of retirement savings, said on Friday it supported “boards and management teams of companies that deliver long-term value for members, and both BlueScope and SGH fall within this category”. However, “we support the BlueScope board’s decision to reject the offer and to remain focused on executing the company’s strategy without distraction”, a spokesperson said. “The current offer for BlueScope does not reflect what we presently believe is the underlying value of the business. “Based on our current valuation, we would only support a transaction that was materially higher than the price of $30 per share currently proposed.” BlueScope’s strongly worded rejection on Wednesday referenced current growth strategies it believes will deliver better value for shareholders than the SHG/Steel Dynamics offer. “Let me be clear – this proposal was an attempt to take BlueScope from its shareholders on the cheap. It drastically undervalued our world-class assets, our growth momentum, and our future – and the board will not let that happen,” BlueScope chair Jane McAloon said. “This is the fourth time we’ve said no (to Steel Dynamics), and the answer remained the same – BlueScope is worth considerably more than what was on the table,” she said. Australian Super only disclosed on Thursday that it had bought an extra 1 per cent of BlueScope, or 4.4 million shares, for up to $130 million to lift its stake from 12.5 per cent. The buying extends back to before early November but includes 2.6 million shares bought on Tuesday, just a day after the SGH/Steel Dynamics offer was revealed. BlueScope shares were 10¢ at $29.30 as at 10.15am.