Corus at 7-yr high; Tata down 1.67%

New Delhi, Jan 19 | Updated: Jan 20 2007, 05:47am hrs
Shares of Corus Group Plc, the UKs biggest steelmaker, rose to their highest in seven years after reports that Tata Steel Ltd may hike its takeover bid to 600 pence a share. That information is baseless, Sanjay Choudhry, a Tata spokesman, said on Friday.

The new bid would counter Brazils Cia Siderurgica Nacional SAs offer of 515 pence.

Corus shares advanced 5 pence, or 0.9%, to 542.50 pence as of 10.24 am in London, after earlier gaining as much as 2.4 % to 550.50 pence, the highest since March 2000. Shares of Corus have risen 74% in the last 12 months, compared with an 87% increase in the ten-member Bloomberg Europe Steel Index.

In comparison, Tata Steel shares have been the third-worst performer on the Sensex over the past three months, a sign the company may be bidding too much.

Tata Steel stock ended the week on a negative note. It opened on Friday at Rs 470, went on to touch a high of Rs 479.40, but ended the day at Rs 467.7, a loss of Rs 7.95 or 1.67%. Around 9.44 lakh shares changed hands. Although the scrip has gained Rs 13.05 or 2.87% from Rs 455.55 in the last one month, Tata Steel is still trading far below its 52-week high of Rs 679 on May 3, 2006.

The predators gain will be enhanced market share, although I wonder if prices for Corus are now going too far, Stephen Pope, head of equity research at Cantor Fitzgerald in London, said on Friday. Time to take the money and invest elsewhere, he added.