* Apollo's bid is non-binding - source
* JP Morgan's One Equity interested in plant again - source
* EU commissioner reassures local authority over sale timing
By Silvia Antonioli
LONDON, July 22 A consortium led by steelmaker
Aperam has made the only binding offer so far for Finnish group
Outokumpu's stainless steel plant in Terni, Italy,
two sources familiar with the matter said.
This contradicts previous reports of at least two binding
offers, and highlights the limited interest so far in one of
Europe's biggest and most modern steel plants in an industry
currently dogged by poor demand and weak prices.
Outokumpu has agreed to sell the Acciai Speciali Terni steel
mill as a condition for securing the approval of European
competition authorities for its purchase of Inoxum, the
stainless steel arm of rival ThyssenKrupp.
Outokumpu has twice requested a postponing of the deadline
to sell the plant because it thought bids were "unsatisfactory".
Four parties expressed interest in acquiring the plant in
the spring: U.S. private equity funds Apollo and JP Morgan's One
Equity Partners, the consortium led by Luxembourg-based Aperam
with Italian steel companies Arvedi and Marcegaglia,
and Chinese stainless steelmaker Tsingshan.
"The only binding offer is from Aperam," an European
Commission source told Reuters on condition of anonymity.
"The other offer is from Apollo, but is not binding."
Outokumpu declined to comment, while Aperam said only that
it remains interested in the plant. Apollo was not immediately
available to comment.
According to a second, industry source, JP Morgan's private
equity fund One Equity Partners, which after initial interest
failed to place a bid, is once again looking at the plant.
"One Equity Partners seems to be back in the game," the
source said. "But the fund did not carry out due diligence last
spring so any interest from them would still be at an initial
JP Morgan declined to comment on One Equity's interest.
The Terni plant can produce up to 1.7 million tonnes of
steel a year and registered sales of about 2.5 billion euros in
the latest financial year. Its production was down by about 20
percent in May and June, generally a peak production period,
compared with the previous months, presumably a reflection of
lower orders, according to a source at the plant.
FEARING FURTHER DELAYS
The European Commission is now putting pressure on Outokumpu
for a quick sale to allay fears that further delay could damage
the Terni plant, one of the largest employers in Italy's Umbria
Workers at the Terni plant and local authorities have
recently expressed concern about the extension of the sale
process which could worsen the situation of the plant in one of
Italy's unemployment blackspots.
Joaquín Almunia, vice-president of the European Commission
responsible for competition, sent a letter last week to the
president of the Umbria region to reassure her that the sale
will be completed as soon as possible with a financially solid
buyer that can secure the competitiveness of the plant.
In the letter Almunia said, regarding a presumed aggressive
pricing policy carried out by Outokumpu at the Terni plant, that
the commission has not found any decisive evidence regarding a
potential infraction of Outokumpu's obligation to preserve the
plant's competitiveness and profitability.
The Terni plant employees almost 4,000 people directly and
indirectly and accounts for about 20 percent of the gross
domestic product of Umbria.
The plant, which produces steel for major carmakers, home
appliances and energy production, will eventually will be a
competitor of its current owner.