US Steel to explore strategic alternatives after unsolicited bids

Steelworkers at the US Steel Granite City Works in Granite City, Illinois, US, May 24, 2018. REUTERS/Lawrence Bryant/File Photo

(Reuters) – United States Steel (XN) said on Sunday it will initiate a formal review to assess strategic alternatives to the steel product after receiving multiple unsolicited bids for part or all of its business.

Without disclosing details about the strategic alternatives, CEO David Porritt said in a statement that the review began after the steel producer received “several unsolicited proposals that ranged from the acquisition of certain production assets to considerations for the entire company.”

The steel producer said Barclays Capital and Goldman Sachs (GS.N) are acting as financial advisors to US Steel, while Milbank LLP and Wachtell, Lipton, Rosen & Katz are acting as legal advisors.

Rival Cleveland-Cliffs Inc (CLF.N) said Sunday that it previously proposed buying US Steel in a private offer on June 28, which US Steel’s board of directors rejected as “unreasonable.”

Cleveland-Cliffs said in a statement that it had offered to pay $17.50 in cash and 1,023 shares of Cliffs stock for each US Steel share.

US Steel, which has been raising prices to offset the impact of higher costs related to raw materials and energy, saw strong demand for steel products, which helped the company beat profit estimates for the second quarter.

US Steel also expects to complete approximately $75 million of common stock buybacks in the second quarter under its existing $500 million stock repurchase license.

Additional reporting by Akanksha Khushi and Jyoti Narayan in Bengaluru; Editing by Lisa Shumaker, Paul Simao, and Chris Reese

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