United States Steel Corp. started signing confidentiality agreements and exchanging due diligence with interested parties as the company considers options more than two weeks after dismissing a takeover offer from Cleveland-Cliffs Inc.
(Bloomberg) — United States Steel Corp. started signing confidentiality agreements and exchanging due diligence with interested parties as the company considers options more than two weeks after dismissing a takeover offer from Cleveland-Cliffs Inc.
US Steel said it is signing agreements with “numerous third parties,” the Pittsburgh-based steelmaker said in a letter to shareholders published Tuesday. “While we don’t know how long the process will take, the board of directors, management team and outside advisers are moving quickly to complete it.”
The steelmaker’s shares rose 2.2% to $30.57 at 10 a.m. in New York. The stock is trading below the current value of Cliff’s offer of $32.71 a share.
US Steel’s letter is the latest in a flood of announcements over the last 17 days by the company and rival Cliffs. The domestic steel industry has been captivated by the battle over the fate of the storied steelmaker since US Steel disclosed it received multiple proposals to sell part or all of the company in mid August.
US Steel advised investors on Aug. 13 that it initiated a strategic review after rejecting Cliffs’ $7.25 billion cash-and-stock bid. A day later, closely held industrial group Esmark Inc. announced a surprise all-cash offer of $7.8 billion — only to bow out last week because the influential United Steelworkers union gave its support to Cliffs.
The United Steelworkers’ has a say in any potential sale of mills or assets where any of its union members are part of the workforce. If US Steel accepts a “bona fide” offer, the USW has the right to make a bid. While US Steel isn’t obligated to accept, the company can’t accept another deal unless it’s superior to the union offer.
USW President Tom Conway said nearly two weeks ago that the union would transfer to Cliffs its right to launch a future counteroffer. The USW chief has repeatedly said the labor group would exclusively support Cliffs on any takeover proposals.
(Updates shares in third paragraph.)
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