What happened? Salzgitter issued a press release noting that its second largest shareholder GP Gunter Papenburg (~25%), a German building materials conglomerate, alongside a recycling company, is considering ''to submit a voluntary public takeover bid'' in order to acquire at least 45 % of the steelmaker''s shares. Shares jumped more than 30% after market. Who''s involved? Salzgitter notes that the consortium which is likely to submit a bid is made of: . GP Gunter Papenburg: Based in Hanover, the private company has reportedly ~4,000 employees and operates in the construction, building material, and raw material sectors. The company started to build its stake in Salzgitter in 2020 (5%) followed by two blocks acquired in 2021 (10% then 15%) and rising to the current 25% ownership in May 2022. The company has also two board seats. . TSR Recycling: TSR is one of the leading ferrous and non-ferrous metals recyclers (8.5mtpa) in Europe with 4,000 employees. It recently partnered with Thyssenkrupp on a new processing plant in Duisburg. No stake has been reported. Any deal would also involve other key stakeholders: the unions (97% of workers under a collective agreement, Works Council has board representation) and the State of Lower Saxony which has a 26.5% stake (and has recently provided a EUR 300m grant to the company''s decarbonization project). What''s next? Salzgitter press release indicates that there is a strong probability the company will soon receive an offer. Once/if an offer is received, the company will have then to communicate an opinion on the nature and quality of the bid. We don''t believe this is part of a broader strategic review process. Salzgitter will report 3Q24 results next week, on Monday 11 Nov. BNPP Exane View: Salzgitter had been the worst performer of our global coverage, down 50% YTD, suffering from a more volatile product mix (plate/tube) and over-exposure to a weaker German market (~50% of group sales). This perhaps makes...