There are rumors; see posting below. Right now, I can see DFS moving to 32 or so, and within the next few weeks. I doubt that DFS will sell out though. The only possible final choise would be with a non unionized company. Not sure if Unisor is or not. Is there not a poison pill provision on hostile take over?
Takeover talk lifts Dofasco shares
Fri 06 Aug 1999
Financial Post Investing
Stephen Miles and Barry Critchley
Two weeks after reporting its best financial results in a decade, shares of steelmaker Dofasco Inc.
continued to climb yesterday as rumours circulated in the market that the company is in play.
Dofasco shares (DFS/TSE) gained $1.40, or 5.2%, to a 52-week high $28.30 on almost seven times
average daily volume of 250,000 shares. It has climbed 11% in the past three trading sessions.
After the market close, Dofasco, at the request of the Toronto Stock Exchange, issued a statement
saying it was unaware of any factors affecting its market activity.
But analysts said there was talk the Hamilton-based company has been shopping itself around to
potential U.S. buyers. One industry source, who asked not to be named, said it could fetch up to $34
a share and a deal could come soon.
Michael Locker, a steel analyst at Locker Associates in New York, said there is persistent talk that
Dofasco is looking for a suitor, but the buyer "is still a mystery." He said potential purchasers include
Pennsylvania-based Bethlehem Steel Corp., Cleveland-based LTV Corp. or Stelco Inc. Stelco stock
(STEa/TSE) climbed 30 cents to $11.95.
"Bethlehem is on the prowl for acquisitions and LTV could be another possibility," Mr Locker said.
"Both are unionized companies and Dofasco is non-union so there are some complications, but I don't
think it would be a blocker."
But other analysts believe Bethlehem is not a candidate because it is smaller than Dofasco and less
profitable. "Dofasco has a higher market cap, less debt and is much more efficient," said one.
Instead, he said France-based Usinor SA is a more logical candidate because it is "acquisitive, much
bigger than Dofasco and already has a relationship with the Canadian company." Usinor is a 20%
joint venture partner in the DoSol Galva hot-dip galvanized steel mill in Hamilton. The mill
manufactures auto body panels.
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