Thainox share sale rumoured to Posco

       Thainox Stainless Plc, Southeast Asia's largest stainless steel producer, said yesterday that its top shareholder was in sale talks, stoking speculation of a possible $370-million sale to the world's sixth-largest steelmaker.
       Thainox did not identify a possible buyer, but a source at the South Korean steelmaker Posco told Reuters on Wednesday that talks to buy a further stake in Thainox were in the final stages.
       The Mahagitsiri Group, which owns 51.7% of Thainox and represents one of Thailand's richest families, was in talks for a possible sale of shares to an undisclosed party but was undecided, a stock exchange statement said.
       Prayudh Mahagitsiri, the company's chairman and chief executive, and a key power-broker in the government led by deposed former prime minister Thaksin Shinawatra, declined to comment on the reports.
       The news sent Thainox shares (INOX)up 11.5% to a four-year high of 1.65 baht in the morning session on the Stock Exchange of Thailand. The shares closed yesterday at 1.50 baht, up two satang, in trade worth 86.4 million baht. The stock has risen nearly 69% this year on speculation about a possible sale.
       "We were informed that they are in the process of negotiation on the terms and conditions of the share sale transaction, and until now they have reached no conclusion," it said in the statement to the SET.
       Posco had no official comment yesterday regarding the possible acquisition of Thainox Stainless Plc.
       But an industry source close to the matter said:"If share prices are rising [as in the current situation], it will be hard for Posco to acquire Thainox."
       Posco currently owns 15% of Thainox.Analysts say the South Korean steelmaker is seeking to acquire the Thai company to expand its cold-rolled coil capacity and overseas presence.
       But any acquisition that raises Posco's stake to 25% or more would require it to offer to buy the remaining shares, according to Thai market regulations.
       Earlier this week, Korean media quoted unidentified industry sources as saying Posco would buy 85% of Thainox for between 400-500 billion won ($342 million to $427.5 million). But the company source said that the rumoured acquisition prices were not correct.
       Based on a market price of 1.57 baht,the value of Thainox's remaining 85%stake is about 12.24 billion baht.
       Thainox has 300,000 tonnes of capacity and exports 40% of its output to Europe and other overseas markets.