Cleveland-Cliffs wants U.S. Steel to disclose other buyout proposals
Cleveland-Cliffs, the steelmaker attempting to acquire the historic Pittsburgh company U.S. Steel, wrote a letter demanding that U.S. Steel disclose any other buyout offers it has received.
Last week, the United Steelworkers union (USW) said it would only back the Cleveland-based steel producer in acquiring U.S. Steel.
The letter, dated Aug. 22, notes that the Right to Bid assigned by the USW means U.S. Steel must “promptly notify Cliffs” of any proposal received for “any possible transaction” by a third party.
U.S. Steel rejected a $7.3 billion buyout proposal from Cleveland-Cliffs on Aug. 13, saying Cleveland-Cliffs was pushing it to accept the terms without being allowed to conduct proper due diligence. It also said it had received “multiple unsolicited proposals” for the company’s assets.
Sewickley-based industrial conglomerate Esmark has made an offer of $7.8 billion.
“Neither the USW or Cliffs has received any of such proposals or ‘inquiries,’” Cliffs’ chief executive Lourenco Goncalves wrote.
Goncalves’ letter was in response to another letter by U.S. Steel sent to employees, assuring them that any potential buyer would need to recognize the USW as a representative of its employees and that a buyer would need to assume the terms of any contracts in place with workers.
U.S. Steel’s letter, also dated Aug. 22, said that while the existing basic labor agreement between the company and union grants USW the right to submit its own transaction bid, the agreement “does not grant the USW, or any party it assigns its rights to, the right to prevent a potential transaction — with any party — that our board decides is in the best interests of our stockholders.”
Cleveland-Cliffs said its proposal, made July 28, would create a company that would be among the 10 biggest steelmakers in the world and one of the top four outside of China, which dominates global steel production.
Cleveland-Cliffs is the largest producer of flat-rolled steel and iron in North America.
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