Takeover Of Industrial Sector Continues

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Northeast steel plants merging or going completely under...

STEUBENVILLE, WV—Reports today from news services in India say Essar Steel is making a bid to buy Wheeling-Pittsburgh Steel Corp. from parent Esmark Inc., which completed its takeover of the local steelmaker in November.

The Economic Times of India is reporting industrial Essar is in a bidding war for Wheeling-Pitt with Russia’s Severstal. The newspaper placed the value of Wheeling-Pitt at $1.5 billion.

The value of the company has been an issue of late as Esmark prepared federally required financial reports on year-end and first quarter data. Company officials have said there were several issues delaying the financial reports, including how to set values for some of the company’s assets, as well as accounting complexities relating to the completion of the Esmark takeover in the fourth quarter. The value of a deal for Wheeling-Pitt was not disclosed in the reports.

Esmark stock has been on the rise since March 28, when its adjusted closing price was $11.27. The stock hit a recent peak of $13.62 at the close on Wednesday and closed Thursday at $13.49. At the time of the Esmark deal in November, the stock was valued at $19.24.

Wheeling-Pitt officials did not immediately return calls for comment this morning. The Economic Times said Essar had no comment on the deal.

Severstal won the bidding war for ArcelorMittal’s Sparrows Point, Md., mill with an $810 million cash bid. Esmark had tried to buy the Maryland steel plant but a $1.35 billion financial package unraveled in December. ArcelorMittal had been ordered by the Justice Department to sell Sparrows Point Industrial to satisfy antitrust concerns regarding concentration of tin production in the eastern portion of North America.

According to the paper, Essar had been a bidder on Sparrows in the second round of bidding, losing out to Severstal.

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