U.S. Steel (X) has rejected an unsolicited $7.3 billion U.S. takeover offer from rival Cleveland Cliffs (CLF) and said it is considering “strategic alternatives” instead.
Pittsburgh-based U.S. Steel said it rejected the offer because Cleveland-Cliffs was pushing it to accept the terms without being allowed to conduct proper due diligence on the offer.
Cleveland-Cliffs had made an offer valuing U.S. Steel at $7.3 billion U.S. based on a purchase price of $17.50 U.S. a share in cash and 1.023 shares of Cleveland-Cliffs stock.
Cleveland-Cliffs said the total value of the offer was $35 U.S. a share, a premium over U.S. Steel’s closing stock price of $22.72 U.S. on August 11.
The company said it decided to reveal the private offer, which was made on July 28, after U.S. Steel rejected it.
For its part, U.S. Steel has said that it has received several unsolicited offers and launched “a comprehensive and thorough review of strategic alternatives.”
U.S. Steel, which said it expects to receive even more takeover proposals in coming weeks, said there was no guarantee that any deal would emerge from the review process.
Cleveland-Cliffs said its proposal would create a company that would be among the 10 biggest steelmakers in the world and one of the top four outside of China.
Currently, Cleveland-Cliffs is the largest producer of flat-rolled steel and iron in North America.
U.S. Steel has been a symbol of industrialization since it was founded in 1901 by J.P. Morgan and Andrew Carnegie, though its stock price has struggled as steel prices have slumped.
Cleveland-Cliffs’ stock has decreased 24% in the last 12 months to trade at $14.69 U.S. a share.
The stock of U.S. Steel is down 7% over the past year and trading at $22.72 U.S. per share.
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