What’s Bell Potter’s view on SGH shares after the BlueScope Steel acquisition proposal?

SGH Ltd (ASX: SGH) shares are in focus after the company confirmed it has submitted a proposal to acquire BlueScope Steel Ltd (ASX:BSL). 

For a quick refresher, on Monday, it released an announcement the company has submitted a Non-Binding Indicative Offer (NBIO), together with Steel Dynamics Inc. (NASDAQ: STLD).

The offer is to acquire 100% of BlueScope Steel by way of a scheme of arrangement (the Proposal).

In the announcement, the company said if the proposal is implemented and following the transaction close, SGH would on-sell BSL’s North American operations to SDI.

This includes BSL’s North Star Flat Rolled Steel Mill and Building and Coated Products North America businesses. 

SGH would retain the remaining BSL “Australia + Rest of World” operations.

This includes Australian Steel Products, Asia Coated Products, and New Zealand and Pacific Islands businesses.

According to the announcement, the consortium has offered $30.00 cash per BlueScope share. 

What did management say?

Commenting on the proposal, Ryan Stokes, Managing Director & Chief Executive Officer of SGH said: 

We believe BlueScope’s Australian business is a strong strategic fit for SGH and we have a proven track record of driving performance improvement in domestic industrial businesses. We intend to leverage our disciplined operating model and capital allocation approach to deliver better outcomes for stakeholders.

Bell Potter weighs in

Following the announcement, Broker Bell Potter released a report with analysis on the company following the proposal. 

The broker said an all-cash consideration of A$30.00/sh was offered, representing a 27% premium to BSL’s share price at NBIO submission (12 December 2025). 

This values BSL at 18.6x EV / FY25a EBIT and 9.5x EV / FY25a EBITDA (SGH: 15.2x EV / FY25a EBIT and 11.4x EV / FY25a EBITDA). 

Bell Potter also noted that Steel Dynamics had made three prior offers through a consortium (not with SGH Ltd) and alone, targeting BlueScope Steel’s North American operations. 

However all prior proposals were rejected on the basis they undervalued BSL and presented a significant regulatory hurdle.

Ultimately the broker believes SGH is securing a strong deal. 

We believe SGH is securing a good deal for shareholders, acquiring the Australia and RoW businesses at cycle-lows. These assets will benefit from SGH’s capital-backing and high-performance operating model which has proven successful with the Boral turnaround.

Valuation remains the same

SGH shares have already jumped 6% higher in 2026. 

But following Monday’s announcement, Bell Potter made no material changes to EPS forecasts or valuations.

The broker has maintained its hold recommendation and $52.00 price target. 

This indicates an upside of approximately 6%. 

The post What’s Bell Potter’s view on SGH shares after the BlueScope Steel acquisition proposal? appeared first on The Motley Fool Australia.

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• SGH confirms $13.2 billion acquisition offer for BlueScope Steel

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Steel Dynamics. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.