Russian steel company Severstal has mandated ABN Amro, BNP Paribas and Citigroup to arrange a $900m bridge loan to back its bid for US steel producer Esmark.
The deal was in jeopardy last night (Thursday), however, when Esmark rejected Severstal’s $670m offer in favour of a higher bid from India’s Essar.
Bidding has not closed yet, and Severstal could top Essar’s offer of $19 per share. The Russian company had offered $17 per share, but Essar upped its bid earlier this week, and its offer is now worth $750m.
Officials close to the loan for Severstal said they were watching how the bidding war developed. "It’s not a done deal, as there’s another bidder, so we’ll see," said one banker. He said, the bridge — if it is drawn down — is intended to be a bridge to a bond and matures on September 30.
Reports this week suggested that margins would be set at 100bp over Libor until July 14, before stepping up to 250bp until August 1, and 275bp thereafter. |
