Can a guppy swallow a whale? Investors may recognize it.
Stelco and US Steel did not immediately respond to a request for comment.
A bid, if it happens, would be surprising. American Steel is much bigger than Stelco. The Canadian steelmaker In 2022, it loaded 2.6 million tons of steel, and US Steel shipped about 15 million. Stelco’s enterprise value, including stock and debt, is about $1 billion. US Steel is about $9 billion.
“We think this makes it a start, and the key to undermining the opportunity is knowing who to partner with. If that partner is a deep-pocketed investor, we wouldn’t be too quick to rule out Stelcon’s chances,” Gordon Haskett analyst Don Bilson wrote in a Friday report. “But for now, we view it as a long shot.”
Stelco may seek a partner to complete the merger.
The potential bid is surprising in another way, too. Stelco actually was once upon a time. Owned In US Steel. After Stelco filed for bankruptcy protection, the US firm bought it in 2007. In the year In 2017 Before listing again as a public company later that year.
“Recent history has not been kind to companies trying to merge with a former partner,” Bilson added.
Altria
(MO) and
Philip Morris International
(PM) “went nowhere” in 2019 and tried to rejoin.
CBS
and the Viacom consortium.
Priority
( PARA ) shares have fallen 70% since the merger plan was announced in August 2019.
It’s no surprise, though, that bids are coming out for US Steel. In the year August 13, the company is investigating strategic options, which may include the sale of the company. Since then, iron maker
Cleveland-cliffs
(CLF) and steel service center Esmark announced the tender.
Esmark processes and distributes steel rather than manufacturing it. The company did not announce that it was financed through the auction and terminated the process.
Global steel giant
ArcelorMittal
(MT) was said to be considering a bid. ArcelorMittal did not comment on the bid, which was a bit odd. Arcelor sold US operations to Cliff In 2020.
U.S. Steel’s stock was about $23 before the announcement and bids began to appear. The Cliffs bid, which is a mix of cash and stock, and the only auction of the season, is tied for strong numbers. Currently worth $32.21 a share.
U.S. Steel stock was at $31.80 on Friday, up 1.8 percent. of
S&P 500
And
Dow Jones Industrial Average
They increased by about 0.3% and 0.1% respectively. Stelco stock was unchanged. Its shares are listed in Canada.
Write to Al Root at [email protected]
