* Stainless steel firm Outokumpu must sell mill by May 7
* Aperam, Arvedi and Marcegaglia form JV to bid
* Outokumpu shares rise 4 pct
(Adds Outokumpu, analyst comments, share reactions, background)
By Jussi Rosendahl and Ben Deighton
HELSINKI/BRUSSELS, Feb 20 Luxembourg-based
stainless steel maker Aperam has teamed up with two
Italian peers to bid for Outokumpu's Terni plant in
Italy, boosting hopes the Finnish company will find a buyer for
Outokumpu has committed to sell the Terni mill by May 7 to
gain regulatory approval for its purchase of ThyssenKrupp's
stainless steel business Inoxum last year.
Analysts have said the sale of Terni could dilute some of
the benefits of the Inoxum deal and getting a good price could
be tough due to the deadline and a weak market.
Steel makers across the world are struggling to cope with
overcapacity as Europe's debt crisis has hit construction and
industrial production. A slowdown in China's economic growth has
also weighed on steel prices.
Aperam, which had earlier flagged its interest for the
highly-efficient Terni mill, said it would be the majority
shareholder of the joint venture, while the two Italian firms -
Arvedi and Marcegaglia - would have equal minority
Outokumpu said it had not made any decisions yet, adding it
had several potential buyers for the plant. It has said it
expects to sign a deal during the second quarter.
Industry sources have said at least five private equity
firms have shown interest in buying the plant, including JP
Morgan's private equity arm.
Shares in Outokumpu rose 4 percent to 0.73 euros in early
Helsinki trade. Aperam shares were up 2.5 percent at 11.16
"This is a somewhat positive sign for Outokumpu, having a
clear buyer candidate now. It seems like Aperam could not buy
the mill alone due to competition reasons," said analyst
Johannes Grasberger from Nordea Markets.
"It is difficult to say where the price will go in this kind
of weak market situation ... But looking at Outokumpu's
finances, they would need to get about 500 million euros," he
Outokumpu, the world's No. 1 stainless steel producer after
the Inoxum acquisition, last week launched a cost-cutting plan
following a quarterly loss of 220 million euros.
(Reporting by Jussi Rosendahl and Ben Deighton; Editing by Jane
Merriman and Mark Potter)