U.S. Steel still weighing interest from 'highly credible bidders' as it considers sale

U.S. Steel says it is still reviewing bids to buy the iconic Pittsburgh-based company, but executives on Friday refrained from giving a timeline for a decision.

On the steelmaker’s third-quarter earnings call, David Burritt, president and CEO, noted that after “receiving multiple unsolicited proposals from credible bidders, ranging from the acquisition of certain production assets to the entirety of U.S. Steel,” the company began what it calls a “strategic alternatives review process.”

Among those offers was one from rival Cleveland-Cliffs. 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 made an offer of $7.8 billion.

Burritt stressed on the earnings call that the 122-year-old company is committed to “maximizing stockholder value” but said confidentiality obligations mean U.S. Steel can’t go into detail.

“I can’t speak to the specifics of the process. I can tell you this: There is serious interest from many highly credible bidders,” Burritt said. “We are flattered by all the interest in our company — flattered but not surprised.”

U.S. Steel is weighing whether to resume operations at its Granite City Works plant in Illinois after idling it in September in response to the strike against automakers by workers represented by the United Auto Workers union.

In September, an Illinois news outlet, the Belleville News-Democrat, reported that between 260 and 265 steel and iron workers at Granite City Works were laid off. The company said it “would not be prudent to speculate as to how long we expect the idling to last, but we currently believe that layoffs will last less than six months.”

Jessica Graziano, chief financial officer, said during Friday’s call that the recent settlement between the UAW and Ford Motor Co. was a “positive outcome,” but the company is still watching negotiations between the union and Stellantis and General Motors.

“Auto makes up about 30% of the flat roll segment (of U.S. Steel’s business),” Graziano said. “As we look through the quarter, we’re really going to focus on the order book and ultimately make a decision on whether or not we see that order book activity reaccelerate, and use that as the guide to decide on making the most efficient use of the footprint and ultimately whether or not we decided to turn Granite City back on.”

U.S. Steel reported third-quarter 2023 net earnings of $299 million, or $1.20 per diluted share. This compares to third-quarter 2022 net earnings of $490 million, or $1.85 per diluted share.

Burritt said the recent quarter marked a key milestone in the steelmaker’s electrical steel line, which produced its first coil in September and first industrial-grade coil in October.

This steel is “essential to our country’s green energy future and serves the automotive and power generation sectors. Our (nongrain-oriented) line can produce the thinnest gauges, widest widths and biggest coils in the domestic industry today,” Burritt said, adding that the “nearly $4 billion of strategic investment in the Mini Mill segment is progressing on time and budget.”

U.S. Steel’s stock was trading at 33.65 just before noon Friday, up from the previous close of 32.57.