Takeover speculation boosts Corus shares

Corus shares leapt by as much as 6% on the London stock exchange today as investors bet that the Anglo Dutch group will be the next steel company in line for a takeover.

The speculation over fresh consolidation in the sector follows the weekend deal that saw Mittal Steel agree a takeover of French rival Arcelor.

Corus shares were the second most traded stock in the FTSE 100 Index today, with the company’s price reaching 455p at one stage, a gain of 6% but still short of the high point for the year of 470p.

One potential bidder could be Russian company Severstal after its hopes of a merger with Arcelor fell through because of the Mittal deal. The company is headed by Russian steel magnate Alexei Mordashov.

Jeremy Batstone, of Charles Stanley Stockbrokers, said talk of further deals in the sector was inevitable.

He said: “Despite the recent deals, steel is still quite a fragmented sector and it looks likely there will be further consolidation.”

Corus employs 24,000 people in the UK at locations including Scunthorpe, Rotherham and Port Talbot. In March 2005, it was listed as the eighth largest company as measured by million metric tonnes of crude steel produced.

The group has revived its fortunes in recent years through a combination of restructuring measures, improved demand and higher prices.

Reports earlier this month said Chelsea Football Club owner Roman Abramovich had started negotiations with Corus over taking a minority stake.

Corus shares were 16p ahead at 444.25p, rise of almost 4%.