Tata has backed away from a £100mn-plus offer for its loss-making UK steel business from British buyer Liberty. Sources said that rather than a token offer for the UK steel-making business, based around the Port Talbot plant, buyer Liberty was offering "significantly more than £100mn" to acquire the assets. However, the company turned down the offer in favour of a potential joint venture with German company ThyssenKrupp.
Industry sources said Liberty House was on the verge of buying the business, with final terms being hammered out in meetings with Tata that went on until the company announced it was in talks with its German rival about a tie-up for its strip steel operations, with Tata's speciality steel units in South Yorkshire and Hartlepool being sold separately.
It is also said that Tata was running a multi-pronged process, claiming the company was ready to sell its entire UK business to ThyssenKrupp, making it Europe's second-largest steel business with a special focus on supplying the British and German car industries. A Tata spokesman said, "Bids were considered in detail on the basis of commercial value and prospects for the future sustainability of the UK business. As bids were confidential, we cannot comment on specific aspects."
Even the government was taken aback by Tata's shocking announcement, springing to their feet and offering to take a 25pc equity stake with potential buyers and offering loan guarantees as it faced criticism.
News of the potential deal with ThyssenKrupp, which would see Tata retain ownership of some of its UK operations, came just four months after Tata’s main board announced it was selling its UK steel operations, putting in jeopardy the jobs of 11,000 staff. The Government was caught out by the shock announcement, and scrambled to respond, eventually offering to take a 25pc equity stake with potential buyers and offering loan guarantees as it faced a heavy criticism. Industry sources say the terms on offer led to Tata seriously considering retaining the business because of the support.
