By Lisa Kerner
Charlotte, N.C., Aug. 27 - United States Steel Corp. agreed to buy Stelco Inc. for C$38.50 per share.
Stelco shareholders with a 76% stake in the company, including Tricap Management Ltd., Sunrise Partners LP, Appaloosa Management LP and Stelco chief executive officer Rodney Mott, agreed to support the transaction, valued at some $1.1 billion.
The acquisition will be accomplished as a plan of arrangement under Canadian law and is slated to close by the end of 2007.
U.S. Steel plans to finance the deal and to retire about $760 million of Stelco debt using cash on hand, existing liquidity facilities and proceeds under two new fully committed senior credit facilities totaling $900 million and underwritten by J.P. Morgan Securities Inc. and Scotia Capital.
"Our acquisition of Stelco is another example of how we are building value for our stakeholders," U.S. Steel chairman and CEO John P. Surma stated in a company news release.
"With major facilities located on both sides of the Great Lakes, this acquisition will significantly increase our ability to respond to market demands and our customers' needs."
U.S. Steel was advised by J.P. Morgan Securities, and Stelco was advised by CIBC World Markets and UBS.
U.S. Steel is an integrated steel producer based in Pittsburgh.
Stelco is a Hamilton, Ont., steel company.
| Acquirer: | United States Steel Corp.
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| Target: | Stelco Inc.
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| Transaction total: | $1.1 billion
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| Price per share: | C$38.50
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| Announcement date: | Aug. 27
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| Expected closing: | By the end of 2007
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| Stock price for target: | TSX: STE: C$26.93 on Aug. 24
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