OAO Severstal, the metals and mining company controlled by Russian billionaire Alexei Mordashov, that fialed to wrench Arcelor SA from Mittal Steel, has offered to buy US steelmaker Esmark Inc for $668 million in cash, matching a $17 per share, or $670-million buyout offer from Essar Steel. (See: Essar Steel to acquire American steelmaker Esmark for $669 million)
However, Essar's offer, which includes the assumption of Esmark's $400 million debt, puts the total value of the deal higher at $1.1 billion.
Severstal, Russia's largest steelmaker, said the offer has "full and enthusiastic support" from the United Steelworkers union.
The union, which has the right to reject any reorganisation that changes control of the company, under a contract that expires on 1 September, had last week rejected the offer from Essar.
The Russian steel mker, based at Cherepovets, is the fourth-largest steelmaker in the US, and is adding production capacity amidst rising metal prices - it has added as much as 12 million tonnes of steelmaking capacity in North America and Europe in the past four years.
US steel-sheet prices rose 47 per cent this year and reached a record $850 a tonne in April.
Severstal which agreed to acquire ArcelorMittal's Sparrows Point plant in Baltimore for $810 million in March, last week agreed to buy Warren, Ohio-based WCI Steel Inc for $140 million.
Esmark has a crude steel capacity of 3.6 million tonnes, or around one-fifth of Severstal's total production last year.
Severstal said it has a five-year capital improvement plan for Esmark.
Esmark chairman and CEO James Bouchard is due to meet Severstal officials to discuss its offer.
Esmark had also issued a statement disputing the union's position, saying the Essar bid "observed both the spirit as well as the letter of the `right to bid' process."
Bouchard said the USW was constantly involved in the consultation process and sought its support for the Essar transaction.