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OneSteel offers 33% premium for rest of Steel & Tube

By Paul McBeth

Monday 29th September 2008

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Australia’s OneSteel offered to buy the 49% of Steel & Tube Holdings Ltd. that it doesn’t already own, gaining full control of New Zealand’s largest distributor of steel products.

OneSteel offered NZ$4.00 cash per share, or NZ$175 million, for the rest of Steel and Tube, a 33% premium to the company’s last trading price, it said in a statement. The offer values Steel & Tube at NZ$353 million.

If the offer succeeds, OneSteel will “simplify its corporate structure and efficiently manage the Steel & Tube business as part of the OneSteel group,” said Geoff Plummer, managing director.

OneSteel plans to delist Steel & Tube, marking the ending the target’s 41-year tenure as a company on the New Zealand stock exchange. OneSteel will retain the brand of Steel & Tube, a company which last month posted a 19% drop in full year profit in the face of a slowing economy.

Shares of Steel & Tube were bid at NZ$3.86, having traded at NZ$3 on Friday. The stock has declined 20% this year, about matching the slide in the NZX 50 Index.


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