BlueScope Steel (ASX:BSL)’s board has unanimously rejected an unsolicited, non-binding, indicative and conditional takeover proposal from a consortium comprising SGH Limited (ASX: SGH) and Steel Dynamics Inc (NASDAQ:STLD).
The consortium proposed to acquire all BlueScope shares via a scheme of arrangement for $30.00 cash per share, less the value of any dividends paid before completion. BlueScope said the time required to implement any transaction would likely reduce the effective value to shareholders below $30.00 per share, while leaving upside with the consortium.
The proposal was also subject to numerous conditions, including the consortium conducting extensive due diligence on an exclusive basis and securing significant debt financing.
Board says offer “very significantly undervalued” BlueScope
BlueScope chair Jane McAloon said the board rejected the approach because it “very significantly undervalued” the company.
“Let me be clear – this proposal was an attempt to take BlueScope from its shareholders on the cheap. 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.”
McAloon pointed to the company’s track record since completing its restructure in FY2017, saying BlueScope has invested more than $3.7 billion in growth projects, delivered more than $3.8 billion in shareholder returns and achieved an 18% average return on invested capital.
BlueScope highlights earnings upside and growth initiatives
The company said the consortium’s proposal did not adequately recognise the value of its asset base, particularly in the context of lower steel spreads in Asia. BlueScope said a reversion of steel spreads and foreign exchange rates to historical average levels would be expected to deliver an additional $400 million to $900 million in EBIT per annum versus FY2025.
The proposal also failed to reflect expected value from initiatives including completion of its current $2.3 billion capital program, a targeted $500 million per annum earnings uplift from growth investments underway, business improvement initiatives — including $200 million of cost and productivity improvements expected in FY2026 — and the monetisation of its 1,200 hectare land portfolio being rezoned and developed.
The company added that the proposal did not appropriately value potential synergies and other benefits available to the consortium and argued the bidders were seeking to use BlueScope’s balance sheet to support an opportunistic, debt-funded offer, noting BlueScope had virtually no net debt at FY2025.
BlueScope also referenced three prior unsolicited approaches that it said were rejected on similar grounds. In late 2024, a Steel Dynamics-led consortium offered $27.50 and then $29.00 per share, with Steel Dynamics to acquire BlueScope’s North American businesses. In early 2025, Steel Dynamics proposed acquiring all of BlueScope, retaining the North American operations and distributing non-North American assets to shareholders, valuing North America at $24.00 per share and asserting the remaining assets were worth at least $9.00 per share. BlueScope said those proposals significantly undervalued the company and carried execution risk, including around regulatory outcomes.
The board continues to assess options to optimise and accelerate value realisation across BlueScope’s businesses.
BlueScope shareholders are not required to take any action.