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Two of the bidders for Tata’s UK steel plants have drawn up plans to work together, the BBC understands.
Liberty House and a management buyout team will submit separate bids for the Tata’s UK assets, including the Port Talbot plant, on Monday.
However, they plan to state in the bid documents that they are willing to work in partnership on a takeover.
It comes after reports the management buyout group, Excalibur Steel, met for talks last week with Liberty.
Excalibur, which is led by a Tata UK steel executive, plans to offer support for Liberty’s bid, while Liberty is set to outline its desire to work with the group, the BBC can report.
Tata put its UK steel assets up for sale earlier this year, including the Port Talbot factory – the UK’s largest steelworks – as well as sites at Newport and Rotherham.
Stuart Wilkie, who headed up Tata’s UK strip steel division and is chief executive of Excalibur, said he could not comment on the proposed tie-up.
“All I know is that we are finalising our own individual bid with our lawyers today, ahead of tomorrow’s deadline,” he said.
Liberty declined to comment. Excalibur is a consortium of public and private sector figures from south Wales.
It has been widely reported that the “refined bids” filed on Monday will then be presented at a Tata board meeting in Mumbai on Wednesday.
Business Secretary Sajid Javid is set to fly to Mumbai ahead of the sale and has offered to co-invest with a private sector partner to save the Port Talbot steel works.
Liberty, run by steel magnate Sanjeev Gupta, and Excalibur are the only two bidders from the UK steel industry.
Others in the running are: investment firm Greybull, which recently bought Tata’s Scunthorpe plant; India’s JSW Steel; China’s Hebei Iron and Steel Group; and UK turnaround fund Endless.
The Sunday Telegraph reported that US billionaire investor Wilbur Ross has also made it onto the shortlist after submitting a late offer.