U.S. Steel Corp.’s stock (X) experienced a significant boost of 27% during premarket trade on Monday, following the company’s rejection of an unsolicited $7.3 billion takeover bid from Cleveland-Cliffs Inc. This bold move by U.S. Steel Corp. would have undoubtedly reshaped America’s steel industry. In contrast, Cleveland-Cliffs’ stock (CLF) tumbled by 2.6%.
Cleveland-Cliffs had publicly announced on Sunday their previously private offer of $17.50 in cash per share and 1.023 shares of Cliffs’ stock for U.S. Steel. This offer represented a 43% premium based on Friday’s closing stock price and valued the entire company at approximately $7.25 billion. However, U.S. Steel’s board swiftly rejected this offer, deeming it “unreasonable.” Nonetheless, the board did acknowledge the receipt of numerous offers for specific parts or the entirety of the company and stated that it was meticulously reviewing its strategic options.
Despite this recent development, U.S. Steel’s stock has declined by 9% year-to-date, whereas on the contrary, the S&P 500 (SPX) has surged by 16%.