January 14, 2009 / 6:00 AM / in 11 years

Thai Thainox declines comment on POSCO bid talk

BANGKOK, Jan 14 (Reuters) - Thainox Stainless PCL (INOX.BK), Thailand’s largest stainless steel producer, declined comment on Wednesday on a newspaper report that it was in talks to be acquired by South Korea’s POSCO (005490.KS).

The Bangkok Post reported that the Mahagitsiri family was in talks with POSCO about the possible sale of its 57 percent stake in Thainox.

“What I can say is no comment,” founder and Chief Executive Prayudh Mahagitsiri told Reuters.

POSCO, which already owns 15 percent of Thainox, is a big supplier of hot rolled coils and acts as export agent for its cold rolled products. Other major shareholders include Japan’s Nippon Steel (5401.T).

Shares in Thainox have risen nearly 20 percent in the past four days on bid speculation. At the midsession break, the stock was up 1.9 percent at 1.07 baht, while the overall market was 1.2 percent higher.

Last month Thainox said it planned to stop production for one month due to weak global demand, adding that the shutdown would help the firm save costs and allow it to carry out maintenance.

Thainox, also Southeast Asia’s largest stainless steel maker, has annual capacity of 300,000 tonnes of stainless steel, widely used in the construction, automobile and household sectors.

Around 60 percent of its output is sold on the domestic market and the rest exported, according to its website. (Reporting by Khettiya Jittapong; Editing by Alan Raybould)

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