Russia's Severstal makes rival bid to Essar's bid for Esmark
21 May 2008
OAO Severstal, the metals and mining company controlled by Russian billionaire Alexei Mordashov, that fialed to wrench Arcelor SA from Mittal Steel, has offered to buy US steelmaker Esmark Inc for $668 million in cash, matching a $17 per share, or $670-million buyout offer from Essar Steel. (See: Essar Steel to acquire American steelmaker Esmark for $669 million)
However, Essar's offer, which includes the assumption of Esmark's $400 million debt, puts the total value of the deal higher at $1.1 billion.
Severstal, Russia's largest steelmaker, said the offer has "full and enthusiastic support" from the United Steelworkers union.
The union, which has the right to reject any reorganisation that changes control of the company, under a contract that expires on 1 September, had last week rejected the offer from Essar.
The Russian steel mker, based at Cherepovets, is the fourth-largest steelmaker in the US, and is adding production capacity amidst rising metal prices - it has added as much as 12 million tonnes of steelmaking capacity in North America and Europe in the past four years.
US steel-sheet prices rose 47 per cent this year and reached a record $850 a tonne in April.