Steel crisis: Excalibur Steel expected to endorse Liberty House in Tata bidding process
The management buy-out group Excalibur Steel, which is expected to bid for Tata Steel’s UK assets today, has effectively endorsed another bidder, Liberty House, for the sale.
Mostly comprised of former Tata executives, Excalibur will voice its support for the group in its bid, City PM understands. This puts commodities investor Liberty House in a favourable position in the sale process for the UK assets. The company is also expected to reference Excalibur in its own bid, saying it will welcome the management buy-out group's support in the deal.
However, City PM also understands that Liberty House would press ahead with its bid even if Excalibur did not tie-up with the investor at a later stage, and Liberty House is not seeking to support the management group’s deal.
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Today is the deadline for final bids to be submitted for Tata Steel's UK assets, which include the blast furnace-powered plant in Port Talbot, as well as sites at Newport and Rotherham. The bids will be presented to Tata's board of directors in Mumbai on Wednesday, where the most likely next step will be to form a shortlist of candidates, although this has not been confirmed by Tata.
Excalibur and Liberty House have been the most vocal candidates in the Tata sales process to date and the management group’s support for the commodities investor removes a major competitor from the process.
In early May, the Indian steel major announced five other bidders had been selected for the second stage of the sales process. It is understood Tata stripped out dozens of potential bidders from the running as it wants to offload the business as a whole.
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As well as Liberty House and Excalibur, the other five bidders include private equity investor Greybull Capital; Chinese producer Hebei Iron and Steel group; India's second largest steel maker JSW Steel; the US' largest steel producer Nucor, and Leeds-based private equity investor Endless.
In April, the UK government said it would consider taking a 25 per cent stake in Tata Steel's UK business in order to help a deal go through. It has so far said it would do this on "commercial terms", which could come in the form of loans or an equity stake.
American tycoon Wilbur Ross, who has invested in a number of failed commodities and telecoms companies, has also been touted as a possible last-minute bidder in the auction after submitting a late offer, reported the Sunday Telegraph.
Liberty House declined to comment. Excalibur could not be contacted prior to publication.