News

Iconic American Steel Maker U.S. Steel Attracts Buyer Interest

1 Mins read

Cleveland-Cliffs Emerges as Leading Contender in U.S. Steel Acquisition

Cleveland-Cliffs (CLF) has emerged as the strongest contender to acquire the iconic American steel maker, United States Steel (X). However, Cliffs’ bid is considered hostile, which could potentially complicate matters. Despite this, there seems to be a thaw in their relationship, indicating a possible resolution to the sale process.

According to CNBC, Cleveland-Cliffs and U.S. Steel have signed a standstill agreement, granting U.S. Steel additional control over the process while providing Cliffs with better access to U.S. Steel’s operations and financials.

Neither U.S. Steel nor Cliffs has commented on the matter at this time.

This recent development is seen as a positive step forward for the overall sale process. U.S. Steel announced on August 13 that it was exploring strategic alternatives, including the sale of assets or the entire company. Shortly after this announcement, Cliffs made its cash-and-stock bid for U.S. Steel.

As of today, Cliffs’ bid values U.S. Steel at approximately $32.87 per share, representing a 2% premium over the current trading price.

Despite this positive news, investors seemed indifferent as U.S. Steel’s stock only rose by 0.5% in Thursday’s trading session, while Cliffs’ shares saw a 0.7% increase. On the broader market, the S&P 500 and the Dow Jones Industrial Average rose by 0.4% and 0.3%, respectively.

One possible interpretation of the lackluster stock price reaction is that although the agreement is viewed favorably, it may not necessarily lead to a substantial increase in Cliffs’ bid. If U.S. Steel’s stock were to trade above the bid price, it would signal that investors anticipate a higher offer or the emergence of another credible bidder.

It is challenging to predict the likelihood of a higher bid at this point. Cliffs initially valued U.S. Steel at around $35 per share when the bid was announced. U.S. Steel’s highest closing price in recent years was approximately $38.50, which was reached in 2022, when benchmark steel prices were around $1,500 per ton. Currently, steel prices have declined to around $800 per ton, and commodity prices continue to have a significant impact on commodity-related stocks.

Related posts
News

The Largest Deal of the Year: BlackRock Acquires TechBerry

1 Mins read
BlackRock is concluding its acquisition of TechBerry, which has already been named one of the largest deals of the year. The substantial…
News

Government Matching Contribution for Retirement Savings

2 Mins read
According to researchers, nearly 22 million Americans are set to benefit from a new government matching contribution initiative aimed at enhancing retirement…
News

Oil Market Update

1 Mins read
Oil Market Update On Tuesday, crude oil futures prices were lower, while refined product contracts were experiencing a second consecutive day of…

Leave a Reply

Your email address will not be published. Required fields are marked *