Travelling Soldier

In the biggest overseas acquisition attempt by an Indian company, Tata Steel today said it was willing to offer $7.64 billion (around Rs 34,500 crore) in cash for buying Corus, which is UK’s largest steel company.

The “indicative, non-binding offer” to acquire 100% stake in Corus at 455 pence a share came exactly 12 days after Tata Steel had announced its interest in the foreign steel company. The offer which came through a “recommendary route” has put the enterprise value of Corus at $10 billion, Tata Steel said in a notice to stock exchanges.

A look at Tatas financials

Tata Steel can back its “non-binding” $7.6 billion offer for Corus with Rs 40,000 crore ($8.84 billion) worth of reserves that the group companies have on their books as on March 31, 2006.

Even if it raises the offer by another 15-20% and the cash outgo goes up to $8.8-$9.1 billion, the group has the financial muscle to handle it as it generates cash flow of over Rs 13,000 crore (close to $3 billion) every year. The collective market capitalisation of the Tata group’s listed companies is now over Rs 2,00,000 crore (about $45 billion).

Tata Sons, the holding company of the group alone has reserves of Rs 9,000 crore ($2 billion). It also holds 80% stake in the group’s IT flagship TCS, currently valued at Rs 80,000 crore (about $17.7 billion).

Tata Steel, which is eyeing Corus, has Rs 9,200 crore (over $2 billiion) worth reserves in its accounts. The company also generates cash flow of over Rs 4,000 crore ($900 million) every year.

The other group companies that have high reserves are TCS (Rs 5,560 crore/$1.2 billion), Tata Motors (Rs 5,128 crore/ over $1.1 billion), Tata Power (Rs 4,782 crore/over $1 billion), Tata Chemicals (Rs 1,953 crore/over $400 million), Indian Hotels (Rs 1,658 crore/about $375 million) and Tata Tea (Rs 1,083 crore/ over $220 million).

Google’s official blog was hacked over the weekend and a fake message left saying the company had decided to cancel a joint project with eBay. Google patched the bug by Sunday and removed the hacker’s message, but not before it went widely noticed causing confusion among Google observers.

The intrusion is the second time this year that the blog has fallen into others’ hands. In March, Google staffers deleted the Google Blog by mistake and someone briefly took control of the Web address.

In the most recent incident, someone used a bug in Blogger, the service the Google Blog uses, to break in. The resulting post was riddled with grammatical and spelling errors that said Google had ended its click-to-call advertising project with eBay because it was ‘monopolistic’.

The Google Blog, is one of the company’s main communication tools. As official corporate messages similar to press releases, its postings often trigger news reports, analyst recommendations, and investor decisions.

On Monday, Google announced the appointment of Dr Prasad Bhaarat Ram, who was previously the CTO of Yahoo India as the head of its R&D centre in Bangalore. Both the web giants have their R&D operations in Bangalore and are on the expansion mode.

Commenting on the move, Yahoo India R&D CEO Venkat Panchapakesan said, “Dr Prasad Ram has decided to move on from Yahoo India due to personal reasons. We value his contribution towards our organisation and wish him success.”

Google already has a head for its Bangalore R&D centre - Arvind Jain. A Google spokesperson said, “Arvind’s contribution to Google India R&D centre has been immense. Arvind will continue to play an important technical and leadership role both in Bangalore and for the rest of the company.” Both web portals have been on the expansion mode in their Bangalore R&D centres.