FerroChina, a Singapore-listed mainland coiled-steel maker, has attracted interest from Australia's BlueScope Steel and Russian firms including Evraz Group over selling an about 20 per cent stake with a current market value of US$167 million.
FerroChina executive director Norman Fong said last month that the company was looking for foreign investors to increase sales and access to raw materials.
The company said last week it had hired Merrill Lynch as a strategic adviser.
FerroChina's shares have this year dropped 22.8 per cent to S$1.42 (HK$8.15). The company's market capitalisation is S$1.13 billion.
'There's been a lot of borrowing of their scrip and shorting the stock so they want to soak up the excess stock by putting in a new strategic investor,' said CIMB-GK analyst Lawrence Lye. 'They feel the stock has been too volatile and shouldn't be that way because they have sound fundamentals.'
FerroChina's plans could change depending on the types of formal bids received.
'The thing to recognise is you don't know what you'll end up with,' said one source. 'Some of the real acquisitive guys may come in with a huge bid and the whole company could get sold.'
