Corus deal set to make many millionaires

Corus shares bought by the company's employees for as low as 3.5 pence in 2002 may just be the reason why they would shed their black and red factory dress for Armani business suits in 2007.

Shares of the company, which is in the middle of a takeover battle between India's Tata Steel and Brazil's CSN, closed at 530.5 pence on Friday and at current market price could make the shareholding employees millionaires overnight.

The UK Takeover Panel has set a January 30 deadline for the two suitors to come up with revised bids for the Anglo-Dutch steel maker and that if a competition situation continues, the winner would be decided through an auction.

Though Corus workers may not be allowed to attend the EGM in their capacity as employees, those holding on to the shares purchased in 2002 might come -- to walk out, probably with a windfall worth millions.

Old-timers in London's share brokerage industry say thousands of workers were seen queuing round local share shops near Corus' Port Talbot steel plant in early 2002 to buy the shares, which were being sold at as low as 3.5 pence a share.

Things have changed since then. Corus is no more in financial crisis, its net profit nearly tripled in the latest quarter.

At the EGM, the factory workers would rub shoulders with the company's high-profile institutional investors, who make up for about 90 per cent of the total shareholders and have affiliations with big names like Standard Life, UBS, Barclays, Goldman Sachs and Lehman Brothers.

The EGM, to decide on Indian steel giant Tata Steel's 4.7 billion pounds offer, was however adjourned in the light of a higher bid of 4.9 billion pounds from Brazil's CSN earlier this month.

After adjusting for a five-time share consolidation executed since the lows of 2002, the loyal workers, who have held onto their shares, are sitting on a huge return of about 30 times their original investment.

Many of them could even walk out as millionaires, depending on the quantity of their shareholding, while as an icing on the cake, both the bidders have assured to safeguard jobs and other benefits for the employees.

A majority of workers at Corus, which has around 24,000 employees in Britain only, is understood to have accumulated a large number of company shares over the past four years -- driven by the low price as well as a share ownership scheme that allows all employees to buy shares up to the value of 125 pounds per month.

Besides, the company had offered an option to its employees in 2004 and 2005 to buy shares worth up to 15,000 pounds at market price. Making things more lucrative is a change of ownership clause in both the schemes, preventing any loss for the employees if the company is sold.