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‘Defend-at-all-cost tactic’: BlueScope digs in with $438m cash return

The steelmaker fired a fresh shot in its takeover defence, announcing a $1-per-share special dividend, but sources close to the bidders have dismissed the move as an act of desperation.

Hugo Mathers and Brandon How
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Stock piles at BlueScope Steelworks in Port Kembla, Wollongong. Dean Lewins/AAP.

Fresh from its emphatic tear-down of SGH and Steel Dynamics’ joint takeover bid last week, BlueScope delivered another show of strength on Wednesday morning by announcing a $438 million special dividend for its shareholders.

But a source close to the bidders, who spoke to Capital Brief on the condition of anonymity, has called the move a “defend-at-all-cost tactic” and a “highly inefficient use of capital”.

BlueScope insists that the move has been done as a part of its “established capital management framework” after selling residential land in West Dapto, Wollongong in December and its interest in the Tata BlueScope joint venture in January.

The unfranked special dividend option for returning capital was taken as an on-market buy-back is currently not available as the company fields the approach by Stokes family-controlled SGH and Nasdaq-listed Steel Dynamics.