Tata to meet Blair before Corus bid

Tata group Chairman Ratan Tata will meet British Prime Minister Tony Blair this week in London. This meeting is seen as a precursor to Tata Steel's bid for the Anglo-British Corus Group.

There has been speculation that Tata might meet the Corus Group brass during his stay in London. Bombay House, the headquarters of the $22 billion Tata group, was not forthcoming on Tata's meetings in London. A questionnaire sent to them remains unanswered.

Last week, Tata Steel announced its interest in acquiring Corus, sending the Corus stock through the roof. Today, it reached a high of 505.50 pence. It was quoted at a 52-week high of 496.25 pence, 3.17 per cent higher than the last close, at the time of going to press. The counter witnessed a total volume of 21.89 million shares.

Sources close to the development said Tata Steel would like to retain the Corus management, if it acquired it, with its chief executive Philippe Varin at the helm.

Varin, who was instrumental in putting the company back on track, may earn more than £8 million (nearly Rs 68 crore) for his 1.4 million shares and options in the company as part of a long-term incentive.

Tata held unsuccessful talks with Corus Group Chairman Jim Leng in July about a potential merger.

A combination of Tata Steel and Corus will create the world's fifth-largest steel producer, with an annual production of 23 million tonnes.

Corus, created through the merger of Dutch firm Hoogovens and British Steel seven years ago, agreed in March to sell most of its aluminium assets as a precursor to taking part in the steel market consolidation.

Tata Steel is understood to have secured funding commitments of $6.5 billion from its advisers, Deutsche Bank and ABN Amro, as well as Standard Chartered. The bid for Corus may be in the region of $9-10 billion.