Sharechat Logo

Steel and Tube eyes NZX50 after Arrium sells out for $91.2 mln

Wednesday 10th October 2012

Text too small?

Local steel products maker Steel & Tube is looking at a return to the NZX 50 index after ASX-listed owner Arrium sold its majority stake for $91.2 million.

Steel & Tube chief executive Dave Taylor told BusinessDesk the underwritten sale of the shares by Craigs Investment Partners was a done deal and will add a number of institutional investors to its share registry. He expects the greater liquidity will help Steel & Tube return to the benchmark index at its next review, which would generate more interest in the company.

"The deal's done - it's my understanding it was placed to a collection of institutional and retail investors," Taylor said. "If you look at our share registry there's not that many institutional investors because of the lack of liquidity."

The Australian company, formerly known as OneSteel, appointed an investment bank to underwrite and manage the sale of its Steel & Tube stake at $2.05 a share, a 15 percent discount to the Steel & Tube's closing price yesterday. The stock dropped 8.3 percent today to $2.22.

Steel & Tube's Taylor said the company will have to review its strategy with a new capital structure, which could include raising capital if there was any industry consolidation. He declined to comment on whether Steel & Tube was looking at any acquisitions.

In late 2008 Arrium made a tilt at a full takeover of Steel & Tube, offering $4 a share, but later gave up when it became clear world markets were set to plunge. More recently, the Australian company has repositioned itself away from being simply a steel company into a broader resources firm.

This month, Arrium rejected a A$1 billion t bid by an Asian consortium Steelmakers Australia last week, that was led by Hong Kong commodities trader Noble Group and South Korean steel firm POSCO.

Arrium's Steve Hamer has resigned from the Steel & Tube board, effective immediately. Arrium-appointed Dean Pritchard will stay on the board and relinquish the chair to John Anderson.

ASX listed Arrium shares were unchanged at 78.7 Australian cents.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Steel and Tube FY profit helped by lower input prices; Christchurch commercial work awaited
Steel and Tube FY profit rises 19 percent as costs fall more than sales
Steel and Tube first-half profit rises 14 percent , sees stronger second half
Steel and Tube returns to NZX 50
Steel and Tube Holdings Limited
Steel and Tube shares fall 6.6 percent after parent Arrium sells half-stake
Steel and Tube annual profit drops 23% as competition squeezes margins
Steel & Tube's first-half profit falls 24%
Steel & Tube sees difficult trading conditions continuing
Steel & Tube taps Janie Elrick as new CFO, company secretary