Corus board recommends Tata takeover offer

The board of Anglo-Dutch steelmaker Corus Group is believed to have recommended accepting Tata Steel's $8.6 billion takeover offer, and an announcement is likely tomorrow.

While no comments were forthcoming from Corus, The Financial Times' online edition today claimed, quoting sources close to the discussions, that the board had recommended Tatas' offer of 455 pence a share of the company.

A Dow Jones report earlier said many of the potentially thorny issues such as clearance from the trustee of Corus' huge pension fund have already been negotiated.

Corus shares have been trading at levels higher than Tatas' proposed bid price of 455 pence a share since the offer was announced. This was largely on expectations that another bidder will attempt to trump Tata Steel's deal, but such a move was unlikely since Corus has been exploring for a buyer for most of this year and has previously talked to nearly all potential candidates.

The deal, if clinched, would make Tata Steel the world's sixth largest steelmaker and enhance the Indian company's capacity to 23 million tonnes a year from just 5 million tonnes at present.

Meanwhile, Community, the British steel workers union, sought safeguards on wages and pension for Corus employees.

Tata Steel must provide "guarantees on the terms and conditions of employment for Corus' UK employees, particularly on pay and pensions," The Guardian newspaper quoted the union as saying.

A British lawmaker also wrote to British Prime Minister Tony Blair asking the government to initiate talks with Tata Steel to ensure that there were no lay-offs.