U.S. Steel Douses $7.3-B Offer From Cleveland-Cliffs With Cold Water

United States Steel Corp. (USS) said that it has rejected a $7.3 billion buyout proposal from rival Cleveland-Cliffs and was reviewing “strategic alternatives” after receiving unsolicited offers, Alexandra Olson reported for the Associated Press (AP).

Photo Insert: Pittsburgh-based US Steel said it rejected the offer because Cleveland-Cliffs was pushing it to accept the terms without being allowed to conduct proper due diligence.

Pittsburgh-based US Steel said it rejected the offer because Cleveland-Cliffs was pushing it to accept the terms without being allowed to conduct proper due diligence.

“At this juncture, we cannot determine whether your unsolicited proposal properly reflects the full and fair value of the Company.

For all of the above reasons, the Board has no choice but to reject your unreasonable proposal,” US Steel CEO David Burritt said in a letter, released Sunday, to Cleveland-Cliffs CEO Lourenco Goncalves, who said the company’s offer has the support of the United Steelworkers union, which has 14,000 members at Cleveland-Cliffs and 11,000 at US Steel.

Cleveland-Cliffs announced earlier Sunday that it had made an offer valuing the US Steel at $7.3 billion, based on $17.50 a share in cash and 1.023 shares of Cliffs stock.

Cleveland-Cliffs said the value of the offer was $35 a share, a premium over US Steel’s closing stock price of $22.72 on Friday.

The company said it decided to reveal the private offer after US Steel rejected it. US Steel has been a symbol of industrialization since it was founded in 1901 by J.P. Morgan, Andrew Carnegie, and others, though its stock price has struggled in recent years as steel prices have fluctuated.

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