The Takeover Panel is planning a rare intervention in the battle for steel company Corus by arranging a two-way auction – a step it has taken only three times in its history.

Brazilian steel company CSN and Indian rival Tata Steel are battling for control of the Anglo-Dutch steel company. Tata has lodged a formal bid worth £4.7bn (€7bn), while CSN's £4.9bn offer is pre-conditional and will only become formal if Tata Steel's bid fails. The panel is set to intervene because both bids are being made using a scheme of arrangement that requires court approval and is not tied to the 60-day deadline stipulated by the panel for traditional UK public company takeovers. The terms of CSN's pre-conditional offer remain valid until July 20, 2007, resulting in a long period of uncertainty for Corus and its shareholders. A source said the panel plans to consult with the three parties and decide on an auction date and avoid a drawn-out battle. The panel may decide on a sealed process where the bidders' offers are final, or a standard auction held over a period of days. One lawyer said: "The code was written at a time when schemes of arrangement were not fashionable. Sooner or later the panel will have to intervene." Schemes of arrangement, which require the approval of a majority in number representing 75% in value of shareholders, are attractive because the buyer does not need to pay the 0.5% stamp duty tax applicable. It would take Tata to raise its bid or withdraw for the situation to come to an end without the panel's intervention. Anthony Pullinger, deputy director-general of the Takeover Panel, said: "We have a situation where there are two buyers and you need some mechanism to decide the winner." He said the panel would take representations from the three parties. He declined to comment on current discussions. A spokeswoman for Corus said: "All parties are continuing their dialogue with the panel, as they have done throughout the process."