US Steel Giant Challenges BlueScope Over Rejected $13 Billion Takeover Bid
BlueScope Steel's American suitor has launched a robust defence of its rejected joint takeover offer, directly questioning the Australian steelmaker's commitment to its North American operations. In a significant escalation of the corporate battle, US-listed Steel Dynamics has publicly criticised BlueScope's strategy, suggesting its key Ohio steel mill requires substantial investment and a revised approach under new ownership to ensure its long-term viability.
Steel Dynamics Defends Offer as BlueScope's Rejection Draws Fire
In its first detailed comments since BlueScope dismissed the $13 billion joint bid with the Stokes family's SGH nearly two weeks ago, Steel Dynamics has described the Australian company's rejection as "very disappointing". The American steel producer has challenged BlueScope to present shareholders with a superior alternative plan, arguing their offer represents compelling value for investors.
Steel Dynamics founder and chief executive Mark Millett used an investor conference call in the United States to outline his company's perspective, emphasising their two-decade collaboration with BlueScope's Northern Star operations. "This gives us a unique and clearly qualified perspective on BlueScope's North American strategy and business model," Mr Millett stated, adding they possess deep understanding of "the associated earnings capability of their assets."
Ohio Steel Mill Described as "Stranded Asset" Needing Rescue
The most pointed criticism focused on BlueScope's flagship Northern Star mill in Ohio, which Mr Millett described as suffering from "severe structural disadvantages" that hamper its competitiveness. He argued the facility essentially functions as a "stranded asset" lacking the physical capability to produce the value-added products required to supply geographically dispersed coil coating operations effectively.
"The steel mill does not have the physical structural capability to provide the necessary value-add products required to supply the geographically disparate coil coating operations," Mr Millett told investors during the overnight conference call from the United States.
Industrial Logic Favours Combination with US Steel Business
Mr Millett presented a clear case for combining the Ohio operations with another American steel business, positioning Steel Dynamics as the "logical owner" for the asset. He revealed that leadership teams from both companies have long recognised the industrial logic of merging their businesses, suggesting such a combination would create stronger, more competitive operations.
"Our respective leadership teams have long understood the industrial logic of combining our businesses," the Steel Dynamics chief executive emphasised, reinforcing his company's position as the natural partner for BlueScope's North American assets.
Investment and Strategic Overhaul Required for Survival
The American bidder's comments highlight growing concerns about the future of BlueScope's Ohio operations without significant capital investment and strategic realignment. Steel Dynamics' intervention suggests the mill requires both financial resources and operational expertise that new ownership could provide, positioning their takeover bid as a potential rescue package rather than merely a corporate acquisition.
This public challenge from Steel Dynamics represents a significant development in the ongoing takeover saga, putting additional pressure on BlueScope's management to either justify their rejection more comprehensively or engage more seriously with their American suitor's proposals.
