New Zealand Steel has paid a 17 per cent premium for a blocking stake in distributor Steel & Tube Holdings, the latest move in an ongoing tussle for the Lower Hutt-based steel products supplier.
NZ Steel, a unit of BlueScope Steel and operator of the Glenbrook steel mill, has agreed to pay $45.98 million – or $1.75 each - for 26.3 million shares in the Steel & Tube. The purchase of almost 16 per cent of the company from three funds managed by Milford Asset Management was agreed yesterday and is expected to settle on Friday.
Steel & Tube shares jumped 7.4 per cent to $1.60.
NZ Steel, which acquired Fletcher's Pacific steel and rolling mill in 2014, is a major supplier of long products, reinforcing, and coloured roofing. Its brands include Colorsteel, Axxis and Zincalume.
AdvertisementAdvertise with NZME.
Parent company BlueScope today said it has no intention of taking over Steel & Tube.
NZ Steel is paying a small premium to the $1.70 Fletcher Building offered for the business in early September as part of its plan to deepen its steel distribution activities and widen its product range.
Milford had been a backer of Fletcher's bid, which Steel & Tube rebuffed. Fletcher improved its offer to $1.90, and left scope for a 5 cent special dividend, but withdrew that on Monday after the Steel & Tube board again rejected it pending commissioning of an independent appraisal.
NZ Steel reported an 11 per cent increase in sales to A$833.6 million ($903.8m) in the year ended June 30. Earnings before interest and tax rose 28 per cent to A$111.7m on stronger domestic and export prices and about A$40m of cost savings.