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Esmark Board Rejects Severstal Offer

06/13/2008 - Esmark’s Board of Directors is recommending that stockholders not tender any shares to OAO Severstal, after reviewing the offer and finding it to be inadequate, uncertain regarding ability to close, and contrary to the best interest of Esmark’s stockholders.

Esmark Inc.’s Board of Directors is recommending that stockholders not tender any shares to OAO Severstal.
 
The recommendation is the result of a thorough review, supported by the company’s financial and legal advisors, in which the company found that Severstal’s unsolicited conditional $17.00-per-share cash tender offer was “inadequate in a number of respects, uncertain with respect to its ability to close, and contrary to the best interests of Esmark’s stockholders.”
 
The Board based its recommendation on a number of factors, including Essar Steel Holding Limited’s recent announcement that it would increase its purchase price to $19.00 per share upon execution of a proposed merger agreement with Esmark.
 
“We have embarked upon a process to provide maximum value to our stockholders with the added benefit of providing what is best for our employees, as well as the communities in which the Esmark companies are located,” stated James P. Bouchard, Chairman and CEO of Esmark. “We continue to invite bidders, including Severstal, to provide a superior proposal to that of Essar.
 
“To date, Essar has stepped up to the plate for our stockholders—first in providing financing to the company at a critical time and now by announcing that it will increase its offer to $19 per share,” said Bouchard. “In addition, Essar has committed to provide over $500 million of capital investment in the Ohio Valley,” he concluded.
 
The Board considered a number of factors before announcing its recommendation, as described in Esmark’s Solicitation/Recommendation Statement on Schedule 14D-9, which is being filed the SEC.
 
Esmark Inc. is a vertically integrated steel producer and distributor, combining steel production capabilities through both blast furnace and electric arc furnace technologies with the just-in-time delivery of value-added steel products to a broad customer base concentrated in the Ohio Valley and Midwest regions.