In a significant development for Minnesota's iron ore industry, U.S. Steel said Sunday that it is initiating a formal review to evaluate strategic alternatives for the steel producer after receiving unsolicited bids for part or all of its business.
The review began after the steel producer received "multiple unsolicited proposals that ranged from the acquisition of certain production assets to consideration for the whole company," U.S. Steel CEO David Burritt wrote in a statement without disclosing details about the strategic alternatives.
Barclays Capital and Goldman Sachs are serving as financial advisers to U.S. Steel, while Milbank LLP and Wachtell, Lipton, Rosen & Katz are acting as legal advisers, according to the steel producer.
Rival Cleveland-Cliffs on Sunday said it previously had proposed to buy U.S. Steel in a private offer on June 28, which was rejected by the U.S. Steel board as being unreasonable.
Cleveland-Cliffs and U.S. Steel have long histories on Minnesota's Iron Range, controlling all six of the area's taconite operations. Cliffs fully owns three of the six taconite mines, and U.S. Steel owns two. Cliffs owns 85% of Hibbing Taconite, and U.S. Steel own 15 %.
Cleveland-Cliffs had offered to pay $17.50 in cash and 1.023 shares of Cliffs stock per U.S. Steel share, according to a statement.
U.S. Steel, which has been raising prices to offset the impact of higher costs related to raw materials and energy, has seen strong demand for its products, helping the company beat profit estimates for the second quarter.
U.S. Steel also expects to complete about $75 million of repurchases of common stock in the second quarter under its existing $500 million stock buyback authorization.
Staff writer Mike Hughlett contributed to this story.
