ThyssenKrupp Gains on Posco Americas LOI Report: Frankfurt Mover
ThyssenKrupp AG (TKA) climbed in Frankfurt trading on a report that Posco (005490) of South Korea submitted a letter of intent to buy its Steel Americas unit, bolstering speculation that bidding competition may boost the price of the asset.
Germany’s biggest steelmaker rose as much as 3.7 percent to 17.63 euros, its highest level since Sept. 17. It was up 2.7 percent at 1:58 p.m., making it the third-biggest gainer among the country’s 110 most highly capitalized stocks.
A bid by Posco would add to the list of potential buyers for the unit Heinrich Hiesinger, ThyssenKrupp’s chief executive officer, said in August that he wants to sell for at least the book value of about 7 billion euros ($9.1 billion). Cia. Siderurgica Nacional SA, Brazil’s third-largest steelmaker by output, hired Bradesco BBI to advise on an acquisition of ThyssenKrupp’s steel plant in Rio de Janeiro state, a person with direct knowledge of the matter said last month.
“The more interested parties there are the better the chance for a higher price is,” Ingo Schmidt, an analyst at Hamburger Sparkasse AG, said by telephone from Hamburg.
Chung Jae Woong, a spokesman of Posco, Asia’s third-biggest steelmaker by output, declined to comment on MoneyToday’s report. “We’re seeing vivid interest,” Kilian Roetzer, a spokesman for ThyssenKrupp, said by phone.
Ternium SA (TX) may consider a bid for ThyssenKrupp’s stake in the Brazilian slab plant, finance chief Pablo Brizzio said in an Aug. 1 conference call with analysts. ArcelorMittal (MT), Nucor Corp. (NUE) and U.S. Steel Corp. were named as potential buyers in an Oct. 1 report in the Wall Street Journal.
“Posco is one of the likeliest buyers,” Alessandro Abate, an analyst at JPMorgan Chase & Co., said by phone from London. The North American plant may appeal to Posco, which supplies Asian carmakers in that market, Abate said in a note today.
ThyssenKrupp is holding talks with potential investors in the unprofitable Steel Americas unit, whose adjusted loss before interest and taxes widened to 262 million euros in the third quarter from 190 million euros a year earlier. More than 10 parties have expressed an interest, finance chief Guido Kerkhoff said on Aug. 10.
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