AK Steel Shares Soar on Report of Possible Bid
Shares in AK Steel Holding jumped after a report that the company was being eyed by ArcelorMittal, a new company being formed through the merger of European steelmakers Arcelor and Mittal Steel.
ArcelorMittal spokesman Luc Scheer said the company had "no comment" on a report on a Financial Times Web site, which said the company plans a $40 a share bid for AK Steel, valuing the company at $4.5 billion.
"We don't have any comment," Alan McCoy, spokesman for Middletown, Ohio-based AK Steel, said Tuesday morning. Chief Executive James Wainscott has repeatedly said during conference calls with analysts about earnings reports that AK wants to stay independent.
Meanwhile, a Wall Street Journal report cast doubts on the deal, citing a source close to Mittal Steel who said a bid for AK Steel would raise antitrust issues related to steel for the automobile industry.
Steelmakers Arcelor, based in Luxembourg, and Mittal Steel, based in Rotterdam, Netherlands, said last week they had moved on the first legal step of forming their combined company -- to be known as ArcelorMittal. After the estimated $41 billion (30 billion euros) deal the company will control around 10% of global steel production.
AK Steel, currently worth about $3.5 billion, makes flat-rolled carbon steel and stainless and electrical steel used in cars and appliances. The company's headquarters and largest mill are in Middletown, about 30 miles north of Cincinnati, and it has smaller plants in Zanesville, Mansfield and Coshocton, Ohio; Ashland, Ky.; Rockport, Ind.; and Butler, Pa.
Such an acquisition would follow other recent consolidation in the steel industry, which includes Mittal Steel's much larger hostile bid for Arcelor and then Tata Steel's purchase of Corus.
Mittal Steel already has a strong presence in the Ohio area. It bought Cleveland-based International Steel Group in 2005 in a deal that included plants in Ohio and Weirton Steel in Weirton, W.Va., across the Ohio River from Steubenville.
Arcelor has said it hopes to complete its acquisition by Mittal Steel by this summer.