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U.S. Steel’s statement came after USW said this week it would only back Cleveland-Cliffs (NYSE:CLF) Inc as a suitor for the company. The union said that “over the years, Cliffs has shown itself to be an outstanding employer to all of its workers.”
U.S. Steel, which rejected Cliffs’ $7.8 billion cash-and-stock offer as inadequate, has said it is exploring “multiple unsolicited proposals”. It has attracted a $7.8 billion all-cash offer from Esmark Inc and as well as potential acquisition interest from ArcelorMittal (NYSE:MT) SA.
In a regulatory filing, U.S. Steel said its agreement with the union gives the latter the right to counter with its own acquisition offer for assets covered under their bargaining agreement. If the union does not make an offer its board deems superior, U.S. Steel can sell itself to the bidder of its choosing.
USW representatives did not immediately respond to a request for comment.
In a presentation on its website, Cliffs had said that the union’s labor agreement with U.S. Steel constituted “a practical right to veto” a deal. It pointed to a requirement for the acquirer to reach a labor agreement with the union before a transaction is completed as a means for the union to stop a company sale.
