Cleveland-Cliffs demands to know who else is bidding for U.S. Steel
PITTSBURGH — Cleveland-Cliffs believes it has a right to know who else is bidding on U.S. Steel, according to a letter Tuesday, Aug. 22, from its CEO Lourenco Goncalves.
He said that right was assigned to the Ohio-based steelmaker by United Steelworkers, the Pittsburgh-based union that represents thousands of workers at both companies and is publicly backing Cliff’s pursuit to acquire U.S. Steel.
A labor agreement with U.S. Steel gives the USW the right to bid on the company or any U.S. Steel facility that receives a bid from another entity, and to be notified when such bids are being considered. Because the USW gave that right to Cleveland-Cliffs, Goncalves said he expects to be notified “promptly” whenever U.S. Steel receives a bid.
Failure to notify would violate the steelmaker’s basic labor agreement with its union, Goncalves explained, ending his letter with a taunting ultimatum: either fork over the proposals, or acknowledge that the proposals don’t exist.
U.S. Steel said on Aug. 13 that it received “multiple unsolicited proposals” to buy some or all of the business. The same day, Cliffs went public with a $7.3 billion offer it had made in late July. On Aug. 14, Esmark Inc. publicly announced its own $7.8 billion all-cash offer.
Outside financial and legal advisors are helping U.S. Steel weigh all of its options. The company rejected Cleveland-Cliffs’ original buyout offer because the Ohio-based steelmaker wouldn’t sign a non-disclosure agreement before U.S. Steel agreed to the offered price.
New filings made public on Tuesday show that shortly after the rejection, Goncalves offered to sign a mutual nondisclosure agreement during the course of negotiations. He asked to meet face-to-face with U.S. Steel’s board of directors, saying “such a meeting would allow me to defend my thesis for how this deal benefits all parties involved.”
U.S. Steel CEO David Burritt responded the next day, thanking Goncalves for his willingness to keep talks private. As for the meeting, he said he’d have to confer with advisors to create a fair process for Cleveland-Cliffs and “other interested parties.”
