Industrial group Esmark joined in the bidding process for US Steel Corp, making a $7.8 billion cash offer to acquire the steel producer. The news caused US Steel stock to jump more than 40%.
US Steel has been looking for a buyer for some time now after the high costs of raw materials and energy have caused declining revenue and profit for the Pittsburgh-based company. Cleveland-Cliffs emerged as the most likely candidate to get the deal done, but their offer of $7.3 billion in cash and stock was rejected over the weekend.
Now, Esmark is looking to take advantage of the situation with a more attractive offer. Many analysts were surprised by the company’s bid considering that their business is focused on processing and distributing steel rather than producing it. The move seemed to have taken US Steel off guard as well.
“This is the first (time) that we have heard from Esmark,” a US Steel spokesperson told Reuters when reached out for comment. “We welcome them to join the multiple parties already in our previously announced strategic alternatives process.”
US Steel shares closed at $22.72 per share on Friday before reaching $32.06 on Monday. This is the highest the stock has been since early 2022.