Corus lost, but CSN shares rise sharply

Shares of Brazilian steel maker CSN rose sharply Wednesday morning after the company lost a bidding war for Europe’s Corus Group PLC, relieving investors who feared a CSN-Corus deal would have saddled the combined company with crushing debt.

Shares of Brazilian steel maker CSN rose sharply Wednesday morning after the company lost a bidding war for Europe’s Corus Group PLC, relieving investors who feared a CSN-Corus deal would have saddled the combined company with crushing debt.

CSN shares rose 5.3 per cent on Sao Paulo’s Bovespa exchange to 64.96 Brazilian reals ($30.93) each after Tata Steel announced it outbid CSN to take over Corus Group PLC for $11.3 billion.

Companhia Siderurgica Nacional SA issued a statement acknowledging that Tata won the bidding and said it now plans to sell 34 million Corus shares.

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“Obviously we would have preferred a different result in respect to the Corus auction,” said CSN chief executive Benjamin Steinbruch. “But we decided not to go beyond the investment and indebtedness limits that we had already established.”

Investors in recent days were betting that CSN wouldn’t win the auction, but had sent CSN shares down in January over concerns that the combined CSN-Corus company would have racked up debt of $14.5 billion.