Shareholder consortium raises offer for Salzgitter to €1.1 billion

A consortium of Salzgitter shareholders has raised its offer for the steel company to €1.1 billion, Bloomberg reports.

GP Günter Papenburg, which is Salzgitter’s second largest shareholder, and TSR Recycling GmbH made a non-binding offer of €18.5 per share. Earlier, according to sources in the know, the offer was around €17.5 per share.

“The company is in the process of examining the non-binding offer, including the price indicated. The outcome of the assessment and discussion with the consortium is open,” Salzgitter said in a statement.

In addition, the company emphasized that it will continue to work on increasing the profitability of the business, including its stakes.

Salzgitter’s largest shareholder, the German state of Lower Saxony, is skeptical. It said it sees no economic benefits or contribution to the company’s sustainable development from the terms of the proposed takeover. The state government is asking the bidders to specify their proposals for more clarity, the Lower Saxony Ministry of Finance said in a statement.

According to the German Manager Magazine, the proposal is also opposed by employee representatives. The IG Metall trade union and the works council remain of the opinion that Salzgitter has the task of securing a sustainable future for the company and jobs without such a takeover, while maintaining independence and co-management.

GP Günter Papenburg owns a 25% stake in Salzgitter. In November last year, it was reported that the company was working with TSR on a potential acquisition offer for the German steelmaker. According to a statement at the time, the investor group was seeking at least 45% plus one share.