| Return to Steel News Headlines| Print This Page |

Bayou Steel Board
Rejects Unsolicited Offer

March 17, 2004 — Bayou Steel Corp.’s Board of Directors has rejected an unsolicited tender offer from Bayou Steel Properties Limited, a corporation unrelated to the company, after a thorough review and consultation with its legal advisers. Bayou Steel Properties Limited launched a tender offer on March 10, 2004, for all outstanding shares of the company's common stock at a price of $2.50 per share.

The Board of Directors stated as reasons for its determination that Bayou Steel Properties Limited's offer is a financially inadequate proposal that is not in the best interests of the company or its shareholders.

In its response, the Board said that:

• Recent reported quotations for Bayou's common stock in the range of $17 to $22 per share are substantially in excess of the $2.50 per share offered by Bayou Steel Properties Limited.
• Recent reported quotations for Bayou’s debt securities support a common stock value significantly in excess of the $2.50 per share offered by Bayou Steel Properties Limited. Prior to their cancellation as part of Bayou's emergence from bankruptcy on February 18, 2004, the company's 9.5% First Mortgage Notes due 2008, $120,000,000 aggregate principal amount outstanding, were quoted in the range of 52% to 55% of principal amount. Pursuant to the company's bankruptcy plan, holders of the 9.5% First Mortgage Notes due 2008 received in the aggregate $30,000,000 principal amount of the company's 9.5% First Mortgage Notes due 2011 and 2,000,000 shares of common stock, which represent all of the currently issued and outstanding common stock. Following Bayou’s emergence from bankruptcy, the company's 9.5% First Mortgage Notes due 2011 have been quoted in the range of 98.5% to 100.5% of principal amount.
• Bayou's projected operating profit and projected income before income tax support a common stock value significantly in excess of the $2.50 per share offered by Bayou Steel Properties Limited. Bayou’s First Amended Disclosure Statement for its Bankruptcy Plan included projections of consolidated operating profit and income before income tax for fiscal years 2004, 2005 and 2006.
• The company has made good financial and operating progress since emerging from bankruptcy. The management team remains in place and has reported to the Board on the Company's improving results since emergence

Bayou Steel's Interim Chairman Charles McQueary said, "There is virtually no rationale for accepting this offer, which would provide inadequate value for shareholders. We are confident that our continued focus on improving operating results will result in future opportunities to enhance value and liquidity for our shareholders."

Bayou Steel Corp. manufactures light structural and merchant bar products in LaPlace, La., and Harriman, Tenn. The company also operates stocking locations along the inland waterway system near Pittsburgh, Chicago and Tulsa.

Close Window