Russia's Severstal extends tender offer for Esmark shares

By Susanna Moon

Chicago, July 18 - OAO Severstal said it extended its tender offer for all outstanding shares of Esmark Inc. to 10 a.m. ET on Aug. 4.

The tender offer has been extended to allow for a review by the U.S. Committee on Foreign Investment. The review is expected to expire at 11:59 p.m. ET on Aug. 1.

As of the close of business on July 18, investors tendered 34,366,906 common shares of Esmark, or 86.98%, of the outstanding amount.

On June 25, the company said Esmark agreed to be acquired by Severstal for $19.25 per share, or $1.25 billion, including debt.

Severstal amended its tender offer, increasing its offer price to $19.25 per share from $17.00, and Esmark's board of directors recommended shareholders tender their shares to Severstal.

The amended tender offer was extended from midnight ET on July 18 and June 25.

Severstal also agreed to purchase Esmark's $110 million term loan facilities from Essar Steel Holdings Ltd., a flat carbon steel manufacturer based in Essar, India.

Severstal noted it expects the transaction to be accretive in 2009.

"We have maintained from the outset of negotiations with Severstal and Essar that we would seek to maximize shareholder value and secure a more predictable and prosperous future for the company," Esmark chairman and chief executive officer James P. Bouchard stated in the release.

Merrill Lynch is the dealer manager, and Citibank, NA is the depositary for the tender offer. MacKenzie Partners, Inc. (800 322-2885 or collect at 212 929-5500) is the information agent.

Severstal is a Moscow-based metals and mining company.

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