UK Investor Michael Flacks 'Very Interested' in British Steel Takeover
British investor Michael Flacks has expressed strong interest in acquiring British Steel and merging it with an Italian steel plant, a move that could establish one of Europe's largest metals groups. The Miami-based Flacks Group, which specialises in purchasing distressed companies, is reportedly collaborating with bankers to prepare a bid for the government-controlled Scunthorpe steelworks.
A Vision for European Steel Consolidation
"Somebody has to take control of British Steel. It's a plant of national importance," Flacks told the Financial Times. "I see an amazing opportunity where most people have overlooked this sector. I'm a big, bullish believer." His strategy involves combining British Steel with the former Ilva steelworks in southern Italy, which his group is already in talks to acquire.
Flacks reportedly plans to secure approximately €5 billion in financing to revitalise the Italian operation and subsequently merge the two producers. This consolidation aims to capitalise on growing European preferences for local suppliers amid geopolitical shifts. "My vision is we're going to do a roll-up of European steel operations," Flacks explained. "People are going to be more receptive to working with British Steel because it won't be in Chinese hands."
Turbulent History of British Steel
The potential bid represents the latest effort to stabilise the loss-making manufacturer, which employs 3,500 people at its Scunthorpe facility. British Steel's recent history has been marked by ownership changes and financial struggles:
- Private equity group Greybull Capital purchased British Steel in 2016, but the company collapsed into insolvency three years later.
- China's Jingye Steel acquired it in early 2020, but the UK government intervened last year with emergency legislation to assume management control amid concerns Jingye planned to withdraw.
- The steelworks has faced significant challenges from a global steel glut, particularly from China, which now produces over half of the world's steel output.
Officials have attempted to increase British Steel's production to improve profitability, especially after Jingye revealed the Scunthorpe operation was losing £700,000 daily before announcing planned closures in March.
Flacks' Investment Philosophy and Background
Michael Flacks, estimated to be worth nearly £1.7 billion according to the Sunday Times Rich List, brings a distinctive approach to potential acquisitions. With a background in retail and investments across industry and property, Flacks emphasises long-term ownership rather than short-term private equity strategies.
"Every deal I do is complicated," he noted. "We're not private equity, we're not a listed company, we don't have shareholders to answer to. We're in it for the long game." This philosophy has previously seen him attempt a £20 million bid for retailer Laura Ashley in 2019 and explore acquiring discount chain Poundworld in 2018, though both companies ultimately entered administration.
Flacks told the Financial Times he would acquire British Steel with the intention of maintaining long-term ownership of the Scunthorpe site, positioning the combined entity to benefit from anticipated infrastructure growth and shifting supply chain dynamics across Europe.
Neither Flacks Group, the Department for Business and Trade, nor British Steel provided additional comments regarding the potential takeover bid.
