Essar to trump Severstal with a $19 per share offer for Esmark

12 June 2008

Mumbai: Essar Steel Holdings Ltd will raise its offer by $2 to $19 per share for US steel company Esmark Inc, trumping a bid by rival suitor OAO Severstal of Russia.

Essar Steel Holdings, a part of Essar Global Ltd, yesterday informed the Esmark board of directors that it intents to increase its offer to purchase all of the outstanding shares of Esmark.

The move comes amidst opposition from both the United Steelworkers union and Esmark's largest shareholder who controls over 64 per cent of the US steelmaker.

Essar said it will increase its offer from the earlier $17 a share to $19 per share upon execution of the merger agreement.

Essar, which made its first offer on 30 April to acquire all outstanding shares of Esmark for $17 per share, had also extended a $110 million loan to help Esmark avoid default.

Severstal, which is controlled by billionaire Alexei Mordashov, matched Essar's $17 per share offer for Esmark, which owns steelmaker Wheeling-Pittsburgh.