NEW YORK, March 14 (Reuters) - Cleveland-Cliffs ( CLF )
CEO Lourenco Goncalves said on Thursday he would consider
another bid for United States Steel ( X ) likely worth no more
than $30 per share if the latter's $14.1 billion deal with
Japan's Nippon Steel ( NISTF ) falls apart.
In an interview with Reuters, Goncalves said
Cleveland-Cliffs ( CLF ), which last year was among the bidders for U.S.
Steel, continued to have the backing of steel union United
Steelworkers (USW) and that U.S. Steel's deal with Nippon Steel ( NISTF )
should be blocked because "Japan is not a friend" of the United
States.
"Japan in the steel trade is worse than China," said
Goncalves. "Japan continues to be a serial dumper of steel in
the United States. I'm going to work to ensure the continuation
of the same tariffs on Japanese steel trade because if we remove
the tariffs, they will just hurt us."
Goncalves' remarks came after U.S. President Joe Biden on
Thursday raised concerns over Nippon Steel's ( NISTF ) takeover of the
iconic 122-year-old U.S. steelmaker.
Biden said it was important for the U.S. to maintain "strong
American steel companies powered by American steel workers" and
that it was vital for U.S. Steel "to remain an American steel
company that is domestically owned and operated."
Since Biden's remarks, U.S. Steel's shares have fallen
more than 15%. The stock closed down more than 6% at $38.26 on
Thursday, far below the $55 per share price it agreed with
Nippon Steel ( NISTF ).
The issue has the potential to overshadow an April 10
summit between Biden and Japanese Prime Minister Fumio Kishida
aimed at boosting the long-standing security alliance between
their countries in the face of growing Chinese strength.
Nippon Steel ( NISTF ) has, so far, said it is confident of
successfully completing the acquisition of U.S. Steel, despite
the opposition it has faced from the USW and certain U.S.
senators. In January, Nippon Steel ( NISTF ) President Eiji Hashimoto told
reporters that "the deal poses no harm to America."
If the all-cash deal with Nippon Steel ( NISTF ) were to fall
apart, Cleveland-Cliffs ( CLF ) may choose to bid for U.S. Steel again
but may not offer more than $30 per share, Goncalves said. That
would be at least a 45% discount to Nippon Steel's ( NISTF ) offer and
substantially lower than Cleveland-Cliffs' ( CLF ) earlier
cash-and-stock bid that it valued at $54 a share in December.
"I would say that 30 bucks is a very good offer. Three
zero. Not 35, not 34, not 33, not 31 but 30 rounded in an
all-cash bid - that would be good enough for U.S. Steel," said
Goncalves. At $30 per share, U.S. Steel would be valued at $6.7
billion.
Since the Nippon Steel ( NISTF ) transaction was announced in
December, several Democratic and Republican U.S. senators have
criticized the deal, citing national security concerns or
raising questions about why the two companies did not consult
U.S. Steel's main union ahead of the announcement.
Donald Trump, Biden's rival in the November U.S
presidential election, has said he would block the acquisition
of U.S. Steel if elected.
"They sold to the wrong bidder. They knew my opinion and
the opinion of the USW, and of course they can ignore my
opinion, but you cannot ignore the opinion of the USW. It was a
fatal mistake," said Goncalves.
U.S. Steel and Nippon Steel ( NISTF ) did not immediately respond to
Reuters' requests for comments.
(Additional reporting by Pratyush Thakur in Bengaluru; Editing
by Krishna Chandra Eluri, Shounak Dasgupta and Jamie Freed)