U.S. Steel (X) -) shares bumped higher after rival steelmaker Cleveland-Cliffs (CLF) -) said it received support for its bid for 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, following its cash-and-share proposal, valued around $7.8 billion. U.S. Steel earlier this week rejected the proposal.
Cleveland-Cliffs said it had agreed to keep all existing employment contracts in place should its takeover bid prevail, but it added that USW workers could veto other rival deals in the process.
Privately held Esmark, which is controlled by the billionaire investor James Bouchard, on Monday trumped Cleveland-Cliffs' offer with a $7.85 billion all-cash bid for U.S. Steel. Reuters, meanwhile, has reported potential interest from Luxembourg-based ArcelorMittal. (MT) -)
U.S. Steel, however, said the USW could no longer block a rival bid now that it's assigned its counterbid rights to Cleveland-Cliffs.
Sen. Vance Weighs in on U.S. Steel Deal
Late on Thursday Sen. J.D. Vance (R-Ohio) asked U.S. Steel to commit to selling to an American buyer. In an open letter the legislator asked Chief Executive David Burritt to consider "the effects of any decision to America’s industrial base and national security and insist that you reject any bids to acquire U.S. Steel or its assets from a foreign entity."
Burritt said his group has received "multiple unsolicited proposals" that ranged from a whole purchase to offers for parts of the business. U.S. Steel launched 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 1.8% higher in early afternoon trading and changing hands at $31.26 each. That puts the stock up about 37.6% since it closed Friday at $22.72.
"Over the medium term, the rollout of infrastructure spending, onshoring of manufacturing, and the trend toward lower-carbon emissions, should allow a potential buyer of the company to significantly benefit in the next steel upcycle," said Gimme Credit analyst Evan Mann.
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