The Stokes family-controlled SGH and its US bid partner Steel Dynamics on Wednesday offered to acquire BlueScope Steel for about $15 billion after previously offering $13 billion.
BlueScope Steel's board vehemently rejected that offer, with chairwoman Jane McAloon memorably lambasting it as an "attempt to take BlueScope from its shareholders on the cheap" by drastically undervaluing its world-class assets and growth momentum.
BlueScope's board said it would consider the new offer with support from its management and advisers.
"As part of its evaluation, the board of BlueScope will consider the proposal relative to the fundamental value of the company, along with the conditionality and executability of the proposal," BlueScope said on Wednesday.
Shareholders would receive $32.35 for each share under the proposal, up from the $28.35 dividend-adjusted offer the duo made on December 12.
The bidders said their new offer was equivalent to $34 per share once accounting for BlueScope's $1.65 per share in dividends announced in recent weeks.
BlueScope shares rose only 2.6 per cent to $28.74 on Wednesday, an indication the market considers a deal as not particularly likely.
If the takeover was more of a sure thing, BlueScope shares would have shot up to much closer to the $32.35 offer price.
RBC Capital Markets analyst Owen Birrell said the bid was probably more of a tool to put pressure on the BlueScope board to allow the pair to conduct due diligence, rather than a "knock-out" offer.
Given that BlueScope's board had rejected the prior proposal as "very significantly" undervaluing BlueScope, RBC did not expect a 13 per cent increase was sufficient to budge the needle on a deal.
Australian Super, BlueScope's largest shareholder with a 13.52 per cent stake, declined to comment on Wednesday.
It had backed the board's rejection of the previous offer.
BlueScope chief executive Tania Archibald told investors at a results briefing on Monday the company intended to lift its shareholder distribution target to return 75 per cent of free cash flow, up from its previous target of 50 per cent.
The Port Kembla steelworks owner posted a first-half net profit for 2025/26 of $390.8 million, up 118 per cent from the same time a year ago.
As well as the Port Kembla steelworks in southern NSW, BlueScope owns the North Star steel plant in the US state of Ohio.
As a mini-mill, North Star uses recycled steel scrap to produce hot-rolled steel at low cost, bypassing the need for iron ore, coke or blast furnaces.
Under the takeover plan, BlueScope would be split up, with SGH keeping its Australian and other regional operations and on-selling North Star to Steel Dynamics.
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