U.S. Steel Rejects $7.3 Bln Takeover Offer From Cleveland-Cliffs

(RTTNews) - United States Steel Corp.(X), which earlier Sunday said it decided to initiate a formal review process to evaluate strategic alternatives for the company, has rejected a $7.3 billion takeover offer from Cleveland-Cliffs Inc. (CLF).

Cleveland-Cliffs on Sunday publicly announced a previously private offer that it had presented to the Board of the United States Steel on July 28, 2023. That offer, which was reiterated in writing to the U.S. Steel Board on August 11, 2023, proposed acquiring 100% of the outstanding stock of U.S. Steel for a per share value of $17.50 in cash and 1.023 shares of Cliffs stock. The offer price implied a total consideration value of $35.00 per share — a 43% premium based on Friday's closing stock price and valuing the company at about $7.3 billion.

Cliffs said its offer was rejected as being "unreasonable" by the Board of Directors of U.S. Steel via a letter Cliffs received August 13, 2023. Therefore, Cliffs feels compelled to make its offer publicly known for the direct benefit of all of U.S. Steel's stockholders and also make it known that Cliffs stands ready to engage on the offer immediately.

Meanwhile, United States Steel Sunday confirmed receipt of unsolicited proposals from cleveland-cliffs and multiple other parties. It reaffirmed competitive strategic review process to maximize stockholder value and also reaffirmed invitation for Cleveland-Cliffs to participate in the strategic review process.

In a letter to Cleveland-Cliffs dated on August 13,2023, U. S. Steel said it was unable to properly evaluate the proposal because Cleveland-Cliffs refused to engage in the necessary and customary process to assess valuation and certainty unless U.S. Steel agreed to the economic terms of the proposal in advance.

U.S. Steel said it cannot determine whether Cleveland-Cliffs' unsolicited proposal properly reflects the full and fair value of the company. It has no choice but to reject the unreasonable proposal.