U.S. Steel Rejects $7.3 Billion Takeover, Cleveland-Cliffs Says

U.S. Steel  (X) – Get Free Report shares bumped higher in pre-market trading after rival steelmaker Cleveland Cliffs  (CLF) – Get Free Report said it received support for its bid the industrial group from the United Steelworkers Union.

The USW transferred its right to counterbid for U.S. Steel’s assets to Cleveland Cliffs, the company said, follow its cash-and-share proposal, worth around $7.8 billion, that was rejected by U.S. Steel earlier this week.

Cleveland Cliffs said it has agreed to keep all existing employment contracts in place should its takeover bid prevail, but added that USW workers could veto other rival deals in the process. 

Privately held Esmark, which is controlled by billionaire investor James Bouchard, trumped Cleveland Cliff’s offer with a $7.85 billion all-cash bid for U.S. Steel on Monday.

U.S. Steel, however, said the USW can no longer block a rival bid now that it’s assigned its counterbid rights to Cleveland Cliffs. 

U.S. Steel CEO David Burritt said his group has received “multiple unsolicited proposals” that ranged from a whole purchase to offers for parts of the business since launching a strategic review earlier this month.

“The interest demonstrated by the unsolicited proposals received to date is a validation of U. S. Steel’s strategy and successful track record of execution,” he added.

U.S. Steel shares were marked 0.05% higher in pre-market trading to indicate an opening bell price of $30.72 each, around 36% higher than last Friday’s close prior to the first bidding interest from Cleveland Cliffs.

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