Tata Steel spurned £100m-plus offer due to pensions burden
Tata Steel turned down a £100m-plus offer for its loss-making UK business, which industry sources believe was likely due to the huge pensions burden.
Tata halted the sales process last week, citing the Brexit vote and the government’s consultation on the British Steel Pension Scheme. Meanwhile, it opened collaboration talks with German rival Thyssenkrupp.
Read more: China agrees to EU deal as steel industry crisis rumbles on
But a source told Morning Wire that Liberty House was willing to pay “significantly more than £100m” for the assets, rather than a token offer of £1.
The two parties had been close to striking a deal ahead of Tata’s board meeting on 8 July, they added. Liberty wanted to work with Tata to solve the pensions problem once they had agreed a conditional sale to “keep momentum going”.
Read more: Tata Steel boss warns UK jobs could be at risk
The news was first reported by The Telegraph.
Industry sources indicated it was the British Steel Pension Fund which prompted Tata to pause sales talks last week. Its deficit of around £700m has proven to be a hurdle to the sales process.
A Tata spokesperson said that it doesn't comment on speculation, and it's pursuing a number of options to achieving the best outcome for its UK business.