(Bloomberg) -- Esmark Inc. said it won’t make a takeover offer for US Steel Corp., citing the United Steelworkers’ support for a rival $7.25 billion bid from Cleveland-Cliffs Inc.
The closely held steel distributor said it would not participate in the purchase process for the iconic steelmaker, saying it “respects” the USW’s support of Cliffs. The statement comes more than a week after Esmark made a surprise offer to buy US Steel for $7.8 billion in cash, which trumped Cliffs’ earlier bid.
Shares of US Steel fell as much as 3.2% after the announcement.
The about-face is the latest in a frantic 11 days that has seen US Steel unexpectedly announce it was exploring strategic alternatives, the rejection of the bid from rival Cliffs, and the labor union coming out and exclusively supporting Cliffs’ bid and no others. The ongoing battle to determine the future of the steelmaker has fixated investors, producers, consumers and analysts gathering in Atlanta this week for the industry’s biggest conference in North America.
Read More: Labor Union Turns Up Heat in Battle Over Sale of US Steel
“The USW was our partner in the successful acquisition of Wheeling Pittsburgh Steel, and we remain close with them,” Jim Bouchard, Esmark chairman and CEO, said Wednesday in an emailed statement. “Esmark had previously stated its intention to bid for, and negotiate a purchase with, US Steel. Esmark respects the position of the United Steelworkers (USW) which is supporting Cleveland Cliff’s offer for US Steel.”
(Adds shares. An earlier version corrected spelling of Steelworkers in first paragraph.)
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