Corus pension trustees meet CSN this week

The battle for Corus is expected to take a decisive shift this week, with the pension trustees of the Anglo-Dutch steel company expected to meet the representatives of Brazil's CSN to understand its commitment to the workers' pension.

Bankers close to the situation said the meeting this week assumes significance, as the backing of the pension trustees is crucial. Tata Steel had received the approval of the pension trustees on October 20.

The bankers said the Tata bid might have an edge over its rival CSN on its commitments to workers for two reasons: One, the CSN offer used more debt than the Tata Steel's offer; and two, the controlling shareholder of CSN has no assets other than the CSN stake, while Tata Steel's promoters, Tata Sons, have investments of nearly $50 billion in various companies.

Tata Steel has announced $8.04 billion takeover bid for Corus. In addition to pay 455 pence for every Corus share, Tata Steel had offered to pay upfront the deficit on the Corus Engineering Steels Pension Scheme with $241.22 million and to increase the contribution rate on the British Steel Pension Scheme from 10 to 12 per cent until 31 March, 2009.

Corus has three pension schemes with about $19.3 billion of assets to cover payments for its 47,000- workforce and many more retired workers.

The pension fund representatives had preliminary discussions with the CSN executives. Now, they will seek more details at this week's meeting.

CSN, Brazil's fourth largest steel company, had approached the Corus board on November 17 with a bid which is 4 per cent higher than that of Tata Steel.

Last week, Tata Steel suffered a jolt when bankers and brokers allied to CSN scaled up their combined holding in Corus Group to nearly 20 per cent.

CSN has began due diligence after announcing its offer of 475 pence a share on November 17. It aims to place a firm bid before December 4, when Corus shareholders will discuss the Tata Steel bid at an extra-ordinary general meeting.