Steel firm says Fletcher bid bad for industry

By Libby Middlebrook

Wellington-based Steel & Tube Holdings is opposed to a takeover by Fletcher Challenge, which it says would be bad for the industry and expensive for consumers.

Fletcher Challenge Steel was revealed as a contender yesterday after the company sought approval from the Commerce Commission to acquire 100 per cent of Steel & Tube Holdings, which is valued at about $150 million and has 40 per cent share of the New Zealand steel market.

But company chief executive Nick Calavrias did not approve of a possible takeover by Fletcher Challenge.

"I just think it would be bad for the industry as a whole. It means too much dominance," he said.

Fletcher Challenge's application follows an announcement by the Broken Hill Proprietary (BHP) Company of Australia that it was reviewing its 50 per cent shareholding in the company.

BHP is looking for a buyer through Credit Suisse First Boston and Fletcher Challenge is just one of several companies understood to be negotiating to buy BHP's shareholding.

Fletcher Challenge's corporate affairs manager, Barry Akers, said the company was yet to decide whether to put in a formal bid for Steel & Tube Holdings.

He said a takeover could complement Fletcher's building operation, which included Auckland-based Pacific Steel and Cyclone.

Steel & Tube Holdings' shares closed down 5c at 165c.