BlueScope plays down $8.8B bid from Stokes, Steel Dynamics

Australia’s BlueScope Steel (ASX: BSL) confirmed on Monday it received an A$13.15 billion ($8.8 billion) takeover proposal from a consortium led by Kerry Stokes-backed SGH (ASX: SGH) and US-based Steel Dynamics (NASDAQ: STLD), but said the offer is unlikely to be acceptable.

The proposal, submitted on December 12, valued BlueScope at A$30 a share, representing a near 27% premium to its December 11 close and about 25% above where the stock was trading on Monday. 

Despite the premium, the country’s largest steelmaker said the price does not adequately reflect its value or future prospects.

BlueScope operates the Port Kembla steelworks in Wollongong and runs five businesses in North America, a footprint that has previously been viewed as a buffer against US tariffs because the company ships limited steel from Australia into the country.

Weaker demand and a significant writedown in its US metal coatings business, however, weighed on BlueScope’s expected fiscal 2025 earnings, denting investor confidence.

The steelmaker also disclosed for the first time that it rejected three earlier unsolicited approaches, including two Steel Dynamics-led bids in late 2024 at A$27.50 and A$29.00 a share.

Those earlier proposals would have resulted in Steel Dynamics acquiring BlueScope’s North American operations. A third approach in early 2025 sought to buy the entire company, retain the North American business and distribute the remaining assets to shareholders, valuing the North American operations at A$24 a share and other assets at no less than A$9 a share.

“These approaches were rejected as they significantly undervalued BlueScope and its future prospects, and presented significant execution risk in relation to regulatory outcomes,” the company said in the statement.

Sector under pressure

The latest proposal comes as the global steel sector adjusts to US President Donald Trump’s 50% tariff on steel imports, imposed on national security grounds to protect domestic production. BlueScope operates almost 100 sites across Australia, with its local business generating A$6.95 billion in sales in the last financial year.

The company has also partnered with Asian steelmakers, including Japan’s Nippon Steel and Korea’s Posco, to explore a potential acquisition of the Whyalla steelworks in South Australia, formerly owned by British businessman Sanjeev Gupta.