CORUS shares hit an all-time high yesterday as the takeover battle for the steel group intensified.

The dramatic bidding war between Brazilian company CSN and India's Tata Steel pushed shares up by more than five per cent.

The rise came as Corus yesterday backed a 515p-a-share offer from CSN, which valued the Anglo-Dutch steel company at £4.9bn.

Only hours earlier, Corus approved a 500p-a-share bid from Tata.

The Tata bid was an improvement on an earlier 455pa- share offer and came in response to reports that CSN was ready to offer 475p a share.

Last night, Anthony Platts, assistant director at Tees Valley investment manager Wise Speke, said the bidding war was likely to continue.

He said: "Tata expected CSN to come in with a bid of around 475p, and tried to be clever and scupper their plans by putting in a 500p bid on Sunday afternoon.

"Now, CSN has had to come back with a bid of 515p - and the market still expects Tata to respond with something even higher. Tata will want to stay in the game, so I wouldn't be surprised if they do something later this week."

Mr Platts said the turn of events was positive for the 3,000 Corus employees in the North-East.

"Both CSN and Tata have promised to close most, if not all of the deficit in the pension fund and contribute extra for future pensions," he said.

CSN has said it will pay £138m into the Corus Engineering Steels pension scheme and increase the contribution rate to the British Steel pension scheme, from ten per cent to 12 per cent, until March 2009.

Following CSN's announcement yesterday, Tata issued a statement saying it was considering its position.

Corus, which was formed when British Steel merged with Dutch rival Hoogovens in 1999, has seen its share price soar by 80 per cent this year amid takeover interest.

The fight for Corus comes at a time of consolidation in the steel industry and follows the acquisition of Arcelor by Mittal Steel.

The proposed deal between Corus and CSN would create the fifth-largest steelmaker in the world, with output of 24 million tonnes a year.

It would also give Corus access to high-quality, low-cost iron ore from CSN's Casa de Pedra mine, in Brazil, as well as fast-growing markets in South America.

CSN chairman and chief executive Benjamin Steinbruch said: "The strategic impetus for this combination is growth - growth in Brazil, in Europe and for our combined workforces.

"Our goal is to unlock the value of our iron ore assets through Corus, transforming them into cost-effective, highquality steel products."