Fastmarkets Metals and Mining
By Robert England
27 Jan 2026
The fate of Steel Dynamics Inc’s (SDI) efforts to renew its bid to acquire North Star BlueScope rests on its ability to garner engagement with BlueScope’s board in Australia and win over its shareholders, according to Phil Gibbs, metals equity analyst at KeyBanc Capital Markets.
“Eventually shareholders are going to have to weigh in even though the management team said the deal is not credible because it undervalues the company,” Gibbs told Fastmarkets on Monday January 26.
The all-cash $8.8 billion joint bid with Australia’s industrial conglomerate SGH Limited on December 12 sought to acquire 100% of all shares of BlueScope Steel, Australia’s largest steelmaker, with a subsequent on-sale of its US assets, including North Star BlueScope in Delta, Ohio.
“Obviously it’s a significant premium to the trailing five-year and 10-year average,” Gibbs said. “It would be highly synergistic to where BlueScope stock has traded in the last several years.”
Takeover strategy
The joint bid with SGH was first made public by BlueScope in Australia on January 5 and subsequently rejected on January 7.
The rejected bid is back in the news as a result of new “perspectives” offered on January 26 by Mark Millett, co-founder, chairman and chief executive officer, during an investor call on the company’s fourth-quarter 2025 earnings.
This will provide “all BlueScope shareholders with a tax-effective cash realization opportunity,” the CEO said on Monday during the company’s quarterly earnings call as part of an extended commentary on the merits of the offer.
“Our actions are intentional and strategic, not opportunistic,” Millett said in the earnings call. “We pay fair value for good businesses that enhance value for all constituents.”
“Our offer was rejected by the BlueScope board without any engagement. And the commentary within BlueScope’s subsequent public releases regarding the proposal has to be seen as very disappointing,” Millett said.
“The premise for the board’s rejection was principally based on insufficient value that they provided shareholders with no reasonable executable alternative strategy that would provide the same certainty of similar shareholder return,” the CEO said.
“We agree [with the board] that the North American assets and their operating teams are of quality as we know them well,” Millett said. “In fact, for many years, our steel operators have frequently worked closely with the BlueScope teams, exchanging best operating practices and safety initiatives.
“The BlueScope North American assets, teams and senior leadership are not the problem,” Millet said. “Rather, BlueScope’s long-term financial and share price underperformance are the result of conservative incomplete growth strategies.”
Next steps
At some point, the board at BlueScope management needs to explore what their shareholders think about the rejected bid, Gibbs said.
“What stood out to me was just how aggressively they went after BlueScope and how unreasonable they felt the management team was there. Their pursuit of it doesn’t seem to be over,” he said.
SDI’s approach remains one of a friendly acquirer. “They’re obviously disappointed but they haven’t gone hostile. But they are trying to enter a period of mediation and calm,” Gibbs said. “It sounded like they are trying to talk some sense into them.”
Potential competing bids could emerge, Gibbs said, raising the question, “Is it eventually going to be to an auction?”
