Fletcher barred from Steel, Tube takeover

By Dita De Boni

The Commerce Commission has allayed the fears of many steel buyers by blocking the takeover of Steel and Tube Holdings by Fletcher Challenge Steel Products.

The commission said it was not satisfied that Fletcher Steel would not become dominant in any New Zealand steel market if the acquisition went ahead.

A decision on the application - filed in late October - had been delayed twice before yesterday's finding.

Fletcher Steel contends the acquisition will complement the company's building operation and has told the commission it is likely to make a new application.

Fletcher corporate affairs manager Barry Akers said the company was not sure if the decision was final.

Bidding for Steel and Tube began when half-owner BHP Australia announced it would consider selling its holding.

Steel and Tube Holdings chief executive Nick Calavrias said the commission's decision was the correct and the only one for the industry, customers and Fletcher Challenge shareholders.

"[People] can figure out for themselves what we mean by that."

He said the 50 per cent shareholding gap left if BHP Australia did withdraw from the company would be open to other contenders.

He did not yet know who the other contenders were, but confirmed that there was both domestic and international interest in the company.

Steel and Tube has 40 per cent of the local steel market.

The company's share price continues to fall, down 1c yesterday to $1.60, while Fletcher Steel shares have fallen 20 per cent in the past six months, closing at $2.45 yesterday.