The world’s first billion-dollar corporation may soon no longer be publicly traded.
US Steel is the subject of what has become a bidding war — on Monday, privately held Pittsburgh-based Esmark unveiled a bid of $35 per share ($78 billion). The day before, Cleveland Cliffs announced a cash-and-stock offer worth the same amount.
US Steel rejected the Cleveland Cliffs offer, and shares of US Steel surged 37% Monday to end at $31.08. The rejection makes sense, as shareholders generally prefer all-cash offers because their value isn’t tied to another company’s share price.
However, US Steel stock fell 2.8% Tuesday to $30.22, well short of the $35 offer price. Cleveland Cliffs shares dropped 2.6% to $15.56.
US Steel didn’t immediately comment on the Esmark offer, according to reports, but an Esmark spokesperson told Barron’s that founder James Bouchard and the company have sufficient capital for the $7.8 billion bid.
Bouchard himself is a former US Steel executive and has spent four decades in the steel industry.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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