Essar formulating strategy for Esmark after rival bid
Ruias-owned Essar Group has gone into a serious strategy formulation mode to ensure the trophy for itself. World's Top Billionaires | India Inc's hotshots
By PTI |
NEW YORK: Confronted by a matching offer from Russia's Severstal for takeover of US based steel company Esmark, Ruias owned Essar Group has gone into a serious strategy formulation mode to ensure the trophy for itself.
While Essar spokesperson declined to comment on whether it was raising the bid beyond 1.1 billion dollar, sources in the know said the next move by the Indian conglomerate would be made in the next 48 hours.
While Essar spokesperson declined to comment on whether it was raising the bid beyond 1.1 billion dollar, sources in the know said the next move by the Indian conglomerate would be made in the next 48 hours.
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Severstal has matched Essar's 17-dollar per share offer for Esmark, while the board and top management of the target company endorsed the Indian bid despite the opposition of United Steelworkers (USW) -- the umbrella organisation of steel workers union, indicating another bidding war.
Calling its bid "superior" to that of Essar, the Russian firm also cited full support of USW and expressed its disappointment over the agreement between Essar and Esmark.
While asking Esmark to make public "actual acquisition agreements" entered into with Essar, Severstal said its offer "clearly constitutes a superior proposal under the publicly available terms of the Essar Steel proposal."
Esmark would have to pay $20.5 million as termination fee and another $two million towards "out-of-pocket" expenses to Essar if the deal falls apart.
Severstal had also rivaled unsuccessfully NRI billionaire Lakshmi Mittal's multi-billion dollar takeover bid for European steel giant Arcelor.
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