Australian media tycoon, US steel firm make $9 billion approach for BlueScope

By Byron Kaye and Rajasik Mukherjee

SYDNEY, Jan 6 (Reuters) – Media billionaire Kerry Stokes made a near $9 billion buyout approach along with U.S.-based long-time suitor Steel Dynamics for Australia’s top steelmaker BlueScope in a move that would substantially broaden his industrial footprint

A deal would be a second marquee purchase in two years for Australian Stokes’ majority-owned SGH under CEO Ryan Stokes, the tycoon’s son, which bought building materials maker Boral in 2024. The Stokes empire was built out of free-to-air TV network Seven but has amassed interests from energy exploration to heavy equipment sales.

SGH and Steel Dynamics said they plan to break up the Australian steelmaker along geographic lines – SGH would take the Australian operations and Steel Dynamics would get the North American unit. Indiana-based Steel Dynamics has assets some 90 kilometres, or 50 miles, from BlueScope’s plant in Ohio.

The deal would be “highly complementary to our existing operations and further expands our capabilities domestically”, said Steel Dynamics CEO and chair Mark Millett.

Shares of BlueScope surged to end 21% higher at A$29.54 on Tuesday against a slightly weaker broader market, just below the A$30 indicated offer price, suggesting optimism a deal would materialise. SGH shares were up 5.4%.

The all-cash approach presents a chance of a quick exit for investors in a company that has seen its profit decline as buyers put off orders due to uncertainty about the impact of tariffs ordered by U.S. President Donald Trump – even though BlueScope says its own tariff exposure is small.

BlueScope said separately it was considering the approach, and noted it had rebuffed three previous approaches from Steel Dynamics or groups involving it – one of those bids just a dollar per share lower than the current indicative bid.

The offer was welcomed by analysts, some of whom said the price would have to be increased.

“I see the SGH-led proposal as opportunistic but potentially value-unlocking for shareholders, albeit highly conditional and execution-heavy,” said Mark Gardner, CEO of MPC Markets, an investment firm.

“For employees and suppliers, there’s inevitable uncertainty,” he added.

The suitors said the Stokes-controlled entity would keep BlueScope’s key Australian management if a deal went ahead, while Steel Dynamics would retain its North American leaders. They did not give any further plans for employee retention.

Omkar Joshi, chief investment officer at Opal Capital Management, said the carve-up proposal looked straightforward since BlueScope’s Australian and U.S. units were separate, but “the bidders will likely need to increase their bid before it can be accepted”.

BlueScope said the bidders wanted exclusive due diligence but it did not specify whether it agreed to it. Under Australian law, a prospective bidder gets exclusive due diligence for four weeks.

SGH hired Barrenjoey and Goldman Sachs to advise on the approach, while Steel Dynamics hired JPMorgan, the companies said.

BlueScope said it hired UBS.

($1 = 1.4896 Australian dollars)

(Reporting by Byron Kaye and Rajasik Mukherjee; Editing by Sherry Jacob-Phillips and Muralikumar Anantharaman)