Formal 'binding bids' for Tata steel UK to be submitted on May 23

Even as anticipation on US Fed interest rate talks and BREXIT dominate the headlines, Tata Steel is quietly moving ahead on its agenda of exiting from its UK business. Tata Steel will be accepting the formal binding bids today by 5 pm IST from the seven short-listed bidders.

The list of seven bidders include JSW Steel, the sole Indian bidder for the troubled steel maker in UK. The bidders list includes Liberty House, Excalibur Steel, JSW Steel, Hebei Iron & Steel, Greybull Capital and US Steel giant Newcore Steel. As per media reports the management of Tata steel (company board) will meet on Wednesday to discuss and short-list  2-3 bidders from the list of 7 formal bids it will be receiving on Monday.

Speculation is rife that two bidders i.e Newcore Steel and Hebei Iron & Steel have already backed out and there is a possibility that Liberty House and Excalibur will jointly bid for Tata steel UK assets. JSW Steel's ability to make a successful bid for Tata Steel UK assets has already been questioned in the analyst fraternity highlighting the cash flow, debt and balance sheet issues for JSW steel.

Liberty House and Excalibur may emerge as successful bidders for Tata Steel UK assets. The details of the arrangement are important as it will determine Tata Steel's gains from the asset sell in UK.

Tata Steel is trading down by 0.60 percent on intra-day basis at 320.70 on Monday. The stock has underperformed the markets over 1 year period and has delivered negative 11.28 percent. The stock however is outperforming markets when one considers 3 months period and 6 months period where the stock is up by almost 26 percent and 40 percent respectively.