Esmark Responds to USW Statements on Collective Bargaining Agreement Provisions
05/21/2008 - Esmark responds to the position taken last week by the United Steelworkers regarding the proposed tender offer and subsequent merger with Essar Steel Holdings Limited.
In a published statement, Esmark Inc. responded to the position taken last week by the United Steelworkers (USW) concerning the proposed tender offer and subsequent merger with Essar Steel Holdings Limited (Essar). In its statement, Esmark emphasized that the company “has in all cases observed both the spirit as well as the letter of the ‘right to bid’ process under the Collective Bargaining Agreement—both in its negotiation with Essar and interaction with the USW”.
“The Esmark proposed transaction was unanimously approved by the company's Board of Directors,” stated Esmark Chairman and CEO, James P. Bouchard. “Essar is a fine company with the resources and management commitment to invest significantly in the Ohio Valley. Esmark brought Essar management to Pittsburgh early in the negotiation process to meet with union officials, and we consistently invited the USW's involvement in and support of the Essar transaction,” said Bouchard.
“The USW is attempting to challenge a transaction which would maximize value for our shareholders and revitalize Wheeling-Pittsburgh Steel and the Ohio Valley,” continued Bouchard. “Despite the USW's direct involvement in the sale process of the company since as early as February of this year, the USW has not made or otherwise arranged an offer for the company that is equal to or superior to Essar's proposed transaction," he said. “Therefore, Esmark is encouraging the USW to join in immediate, open and constructive dialogue with Esmark and Essar to complete the only transaction to materialize as of this date—a transaction which is in the best interests of the shareholders, debt holders, employees, and the communities supported by all Esmark facilities and our Wheeling-Pittsburgh Steel subsidiary.
“Essar Steel Holdings, which owns Algoma Steel, Minnesota Steel, and the Essar DRI project in Trinidad and Tobago, has the potential to become a leading low-cost steel producer in North America,” said Bouchard.
Essar's proposed tender offer for Esmark’s common stock and subsequent merger is subject to certain conditions, including expiration or waiver of any USW right to bid period, the valid tender in the offer of a majority of the fully diluted Esmark common stock, and other customary conditions as well as the approval by the Department of Justice and Committee on Foreign Investment in the United States.
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. Currently headquartered in Wheeling, W.Va., the company produces carbon flat-rolled products for the construction, container, appliance, converter/processor, steel service center, automotive and other markets. The company's products include hot rolled, cold rolled, hot dipped galvanized, electro-galvanized, black plate, and electrolytic tinplate.
