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BlueScope Steel (ASX: BSL) has opened fire on a proposed $13.2 billion takeover bid for the Australian steel giant, with the board unanimously rejecting the offer and declaring that it “very significantly” undervalues its business.
The unsolicited takeover proposal from Kerry Stokes-controlled listed investment vehicle SGH Limited (ASX:SGH) and one of America’s largest steel producers, Steel Dynamics, Inc., was revealed by BlueScope on Monday this week following market speculation of a buyout and planned break-up of the company.
While the offer price of $30 cash per share was well above the previous closing price of BlueScope Steel, the company says the proposed purchase price will ultimately be whittled down by any future dividends to be paid by BlueScope.
With a potential deal of this scale taking some time to settle, BlueScope points out that, should a takeover proceed, shareholders are likely to receive less than $30 per share while delivering "all upside value for the sole benefit of the consortium”.
“Let me be clear – this proposal was an attempt to take BlueScope from its shareholders on the cheap,” says BlueScope Steel chair Jane McAloon in a statement to the ASX after the market closed today.
“It drastically undervalued our world-class assets, our growth momentum and our future – and the board will not let that happen.
"This is the fourth time we've said no, and the answer remained the same. BlueScope is worth considerably more than what was on the table.”
BlueScope says it previously “considered and unanimously rejected” three separate unsolicited offers, including one in late 2024 from another Steel Dynamics-led consortium.
The offer then was pitched at $27.50 per share which was later increased to $29 per share as Steel Dynamics looked to acquire BlueScope’s North American businesses.
In early 2025, Steel Dynamics had put a value of $33 per share on BlueScope with a plan to retain the Australian company’s North American operations and distribute the remaining assets to BlueScope shareholders. That offer had valued the North American operations at $24 per share, leaving the remaining assets valued at least $9 per share.
The company says these offers were rejected because they “significantly undervalued BlueScope and its future prospects”.
“The BlueScope team is well recognised for driving and delivering value for our shareholders and customers,” says McAloon.
“Since its restructure was completed in financial year 2017, BlueScope has invested over $3.7 billion in growth projects, delivered over $3.8 billion of shareholder returns and achieved an 18 per cent average return on invested capital.
“Under the experienced leadership of the incoming MD and CEO Tania Archibald, the board is highly confident that management will continue to deliver superior shareholder value.”
Archibald, who replaces Mark Vassella as CEO on 1 February this year, is chief executive of BlueScope's Australian Steel Products business and when appointed will become the company’s first female group CEO.
BlueScope Steel says the SGH-Steel Dynamics consortium’s takeover proposal fails to recognise the value of BlueScope’s assets with the bid coming during a period of "lower steel spreads" in Asia.
“If steel spreads and FX rates reverted to historical average levels, this would be expected to generate an additional $400-$900 million of EBIT per annum relative to FY2025,” says the company.
BlueScope Steel says the bid doesn’t take into account various positive initiatives currently in place to improve the group’s performance.
This includes an increase in free cash generation following completion of a $2.3 billion capital program under way and a forecast $500 million per annum lift in earnings from growth initiatives and investments which are also in train.
BlueScope is also anticipating $200 million in cost and productivity improvements in FY26, while the company notes that the offer also doesn’t take into account its 1,200ha land portfolio which is currently being rezoned and developed.
SGH, which owns building products group Boral as well as equipment hire business Coates, plans to sell BlueScope’s North American businesses to Steel Dynamics should the buyout proceed.
BlueScope had $11.7 billion in net operating assets at the end of June last year and land assets worth about $2.8 billion once rezoned.
The company generates about 48 per cent of underlying EBITDA from North America and 6 per cent from Australia.
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