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Update 3:35pm: Adds Cliff CEO’s comments to Bloomberg, updates shares.
Cleveland-Cliffs (NYSE:CLF) CEO said he would consider bidding for US Steel (NYSE:X) in the $30s a share if given the opportunity, according to a JPMorgan analyst, which was later confirmed by the CEO in an interview with Bloomberg. US Steel shares fell 8.9%, while Cliffs declined 4.8%.
If given the opportunity, Goncalves would consider a bid “in the $30s,” he said in the interview with Bloomberg on Thursday.
The comments come as President Joe Biden on Thursday called for US Steel (X) to retain U.S. ownership, in a potentially fatal blow to Nippon Steel’s (OTCPK:NISTF) acquisition efforts.
“CEO Lourenco Goncalves said he’d be interested in rebidding for US Steel in the $30s if given the opportunity with a focus on retaining blast furnace assets after all is said and done,” JPMorgan analyst Bill Peterson wrote in a note on Wednesday after hosting the CLF CEO and CFO at the bank’s industrials conference.
The Cliffs (CLF) CEO said he would consider another bid for US Steel (X) if the Nippon Steel (OTCPK:NISTF) deal falls apart, though at a significantly lower price than the Nippon Steel $55 a share price, he told Bloomberg in an phone interview on Thursday. If he were to make a bid he would do it with the back of the steelworker’s union.
Goncalves also said he’s talking regularly to the White House, according to Bloomberg.
US Steel (X) received a $54 cash and stock bid from Cleveland-Cliffs (CLF) before it agreed to a $55 a share all cash deal with Nippon Steel in December. US Steel (X) rejected a $7.3 billion buyout cash and stock offer from Cleveland-Cliffs (CLF) in August.
Although Goncalves may be interested in another US Steel bid, it may not possible, according to a WSJ report on Thursday. Biden administration officials earlier this year evaluated brokering a sale of U.S. Steel (X) to Cleveland-Cliffs (CLF), before deciding it wasn’t feasible, the WSJ said, citing people familiar with the matter.
Goncalves told Bloomberg in an interview earlier this year that the steelmaker’s offer for US Steel (X) is off the table.
“That transaction is no longer available, it’s no longer a backstop for their failure,” he said in an interview with Bloomberg. “If they can’t close — I don’t know where they are at this point — that offer is gone, that offer no longer exists.”