Esmark to Grant Three-Day Extension of Right-to-Bid Period
06/25/2008 - Esmark confirms that an Arbitrator’s decision had cleared the way for its Board to act on competing bids for the company by declining to extend the 52-day “right-to-bid” period given to the United Steelworkers.
Esmark Inc. has publicly confirmed that an Arbitrator’s decision had cleared the way for its Board to act on competing bids for the company by declining to extend the 52-day “right to bid” period given to the United Steelworkers (USW).
Esmark also noted, however, that in keeping with their good relationship with the USW, the company had subsequently agreed to voluntarily extend the USW’s right-to-bid period for another three days, until 5:00 p.m., Thursday, June 26 for the USW to organize a transaction for the company.
The USW had filed an extensive grievance alleging multiple violations of the parties’ collective bargaining agreement. Although the Arbitrator determined that the company did not give the USW sufficient advance written notice of the company's April 30, 2008 Memorandum of Agreement (MOA) with Essar Steel Holdings Ltd., the Arbitrator denied all remedies sought by the USW, other than setting aside this MOA. The Arbitrator determined that the company’s provision of a 52-day “right-to-bid period” to the USW was sufficient under the company’s collective bargaining agreement, and declined to extend that “right to bid” period.
The Arbitrator also held that the company’s Stockholder Rights Plan was not a violation of the collective bargaining agreement, that the termination fee and related reimbursement obligations were not “inappropriate” under the collective bargaining agreement, and that Essar’s increased offer of $19 per share (June 10) did not trigger any requirements under the collective bargaining agreement.
“Our goal throughout this process has been to ensure that we maximize our value to our shareholders, while finding a strategic partner that is committed to investing in the Ohio Valley and protecting our employees,” said Esmark CEO James Bouchard. “We value our relationship with the USW and appreciate the guidance the arbitrator has provided to both parties.
“The board of directors looks forward to continuing this process and making a deliberate and informed decision consistent with our fiduciary duties on all offers,” added Bouchard. “Importantly, the Arbitrator stated that any USW ‘proposal would have to compete with the $19.00 price tag’ before the board.”
Esmark Inc. is a vertically integrated steel producer and distributor, combining steel production capabilities through 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 a wide range of applications.
