Russian's interest in Corus fades

The biggest steel maker in Russia was today said to have dropped its interest in British-Dutch steel group Corus following last week's bid by Indian firm Tata Steel.

The biggest steel maker in Russia was today said to have dropped its interest in British-Dutch steel group Corus following last week's bid by Indian firm Tata Steel.

The Financial Times said Severstal was extremely unlikely to make a bid for Corus to rival the £4.3bn (€6.4bn) Tata offer.

The board of Corus backed Tata's 455p a share offer on Friday sparking rumours on the London market that counter-bids could be tabled from Severstal and Brazilian group CSN.

Other firms thought to be interested in Corus include Novolipetsk of Russia, although Germany's Thyssen Krupp appears to have ruled itself out.

Corus shares closed above the Tata offer price at 473.5p on Friday as investors banked on a rival bid being tabled. They have lifted from as low as 30p three-and-a-half years ago.

Standard Life, the largest Corus shareholder with an 8% stake, has said it is unhappy with at the 455p a share price agreed with Tata.

The proposed deal between Corus and Tata would create the fifth largest steel maker in the world. The agreement came after a year-long search for a partner by Corus as it looked for access to low-cost production and high-growth markets.

A deal with Tata - part of the Tata Group which owns Tetley Tea - would be the biggest foreign takeover by an Indian company.

Severstal, which is in the process of listing on the stock market in London, has been linked with a bid for Corus for months.

However, it is thought that the company has now concluded that mounting a challenge to the Tata offer at the same time as listing could be too difficult.

Corus, which was formed in 1999 when British Steel merged with Dutch rival Hoogovens, employs 47,300 people worldwide, including 24,000 in the UK at sites including Port Talbot, Scunthorpe and Rotherham.

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