The battle for steel group Corus (formerly British Steel) intensified today after Brazilian firm CSN dramatically trumped a takeover offer from Indian rival Tata.
The Corus board backed a 515p a share offer worth £4.9bn (€7.2bn) from CSN just hours after agreeing a 500p a share deal with Tata, which valued Corus at £4.7bn (€7bn) .
Tata said it was "considering its position" having been ditched by Corus and shares in the Anglo Dutch group surged more than 5% to 527p as investors gambled on an escalation of the bidding war.
It left investors in Corus on the verge of a windfall with the share price now more than 160% higher than the 200p of 18 months ago.
Martin Slaney, head of spread betting at GFT Global Markets in London, said: "The market is pricing in further skirmishes as investors speculate that Tata has saved up enough firepower to take on CSN, although talk is of a realistic ceiling of around £5bn (€7.39bn) , or 550p a share, to any future bids."
The moves for Corus came as British Treasury minister Ed Balls told the Evening Standard that no British firm should be immune to a foreign takeover, including the London Stock Exchange which is fighting an offer from US rival Nasdaq.
Heathrow, Gatwick and Stansted operator BAA was sold to Spanish firm Ferrovial earlier this year while port operators P&O and Associated British Ports are also among those now in foreign ownership, in Dubai and the US respectively.
Corus - which was formed when British Steel merged with Dutch rival Hoogovens in 1999 and is the eight largest steel producer in the world - initially accepted a 455p a share offer from Tata in October.
CSN then said it was willing to pay 475p a share and is understood to have spent the weekend thrashing out the terms of a 475p a share offer with Corus.
Its plans appeared to be shattered last night when Tata launched a shock 500p a share bid which was backed by Corus.
Although the pre-emptive strike by Tata took both CSN and Corus by surprise, the Brazilians returned this morning with the 515p a share offer.
Corus chairman Jim Leng ditched his backing of the Tata offer today in favour of a deal with CSN.
"This offer is both higher than the initial proposal by CSN as well as the revised Tata offer of 500p a share," he said.
"It is also consistent with our strategic objective of securing access to raw materials, low-cost production and growth markets.
"The combination of the two businesses will create a strong platform from which to compete and grow in an increasingly global market."
The fight for Corus comes at a time of consolidation in the steel industry and follows the summer acquisition of Arcelor by Lakshmi Mittal's Mittal Steel to create a global powerhouse with output of more than 110 million tonnes of steel a year.
Corus, which has been searching for a business partner for the last 12 months, has been under pressure to link with a low-cost rival as rising raw material and energy costs in the UK and the Netherlands chipped away at profits.