BlueScope’s plan to lift free cash flow by roughly $2 billion by 2029 aims to boost shareholder returns but also raises the stakes for would‑be buyers deciding whether to sweeten their rejected takeover bid.
Right now, the steel producer is in the middle of defending itself against an unsolicited offer from a consortium of industrial and investment groups which the board has already pushed back firmly. The company has just come through a heavy period of capital spending on mills, coated steel facilities and offshore operations and is shifting from spending mode to harvest mode. At the same time, a new leadership team has stepped in, signalling fresh cost savings and a willingness to rethink the group’s structure if that is what ultimately unlocks more value for investors.
Investment bank research suggests that as this capital investment winds down, BlueScope’s balance sheet could have about $2 billion more capacity by 2029, which works out to around $5 per share in extra free cash flow that can potentially be returned to shareholders. Analysts at one global firm currently value the stock near the high thirties per share, notably above the $30 a share bid that is on the table and well above the recent market price sitting in the high twenties. The company has already flagged its stronger cash position with a $1 a share special dividend and has based much of its early defence on a multibillion dollar estimate of surplus property, although some brokers argue those real estate numbers might be overstated by roughly half a billion dollars.
Looking ahead, the story seems to be less about one off asset sales and more about what underlying operations can earn as recent projects in New South Wales, the United States and New Zealand start to deliver. Management appears set to highlight this organic cash build up, alongside an extra $150 million in targeted cost cuts by 2026, as a core argument that staying independent could be more rewarding than selling now. All of this is playing out against unusually weak steel margins in Asia, which are sitting at roughly half their long run average and look too low to last forever, suggesting that any eventual cyclical recovery could further strengthen BlueScope’s hand in this takeover tussle.
