Bloomberg reported that ThyssenKrupp AG climbed in Frankfurt trading on a report that POSCO of South Korea submitted a letter of intent to buy its Steel Americas unit, bolstering speculation that bidding competition may boost the price of the asset.

As per repot, Germany's biggest steelmaker rose as much as 3.7% to EUR 17.63, its highest level since September 17th 2012. It was up by 2.7%, making it the third biggest gainer among the country's 110 most highly capitalized stocks.

A bid by POSCO would add to the list of potential buyers for the unit Heinrich Hiesinger, ThyssenKrupp's chief executive officer, said in August that he wants to sell for at least the book value of about EUR 7 billion. Cia Siderurgica Nacional SA, Brazil's third largest steelmaker by output, hired Bradesco BBI to advise on an acquisition of ThyssenKrupp's steel plant in Rio de Janeiro state.

Mr Ingo Schmidt, an analyst at Hamburger Sparkasse AG, said that "The more interested parties there are the better the chance for a higher price is."

Ternium SA may consider a bid for ThyssenKrupp's stake in the Brazilian slab plant, finance chief Mr Pablo Brizzio said in an August 1st 2012 conference call with analysts. ArcelorMittal, Nucor Corporation and US Steel Corporation were named as potential buyers in an October 1st 2012 report in the Wall Street Journal.

Mr Alessandro Abate, an analyst at JPMorgan Chase & Co, said that "POSCO is one of the likeliest buyers."

ThyssenKrupp is holding talks with potential investors in the unprofitable Steel Americas unit, whose adjusted loss before interest and taxes widened to EUR 262 million in the third quarter from EUR 190 million a year earlier. More than 10 parties have expressed an interest, finance chief Guido Kerkhoff said on August 10th 2012.

Source - Bloomberg

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