(Bloomberg) -- Shares of United States Steel Corp. rose in after-hours trading after Cleveland-Cliffs Inc.’s top executive said he’s still in the market for his rival’s assets.
“Absolutely,” Cliffs’ Chief Executive Officer Lourenco Goncalves told CNBC Thursday when asked if he would bid on US Steel’s assets if Nippon Steel Corp.’s $14.1 billion takeover bid fell through. “We are good to go for the money.”
Goncalves told the network he’s working with investment banks JPMorgan Chase & Co. and Wells Fargo & Co. on a plan. US Steel, Cleveland Cliffs and JP Morgan didn’t immediately respond to a request for comment. Wells Fargo declined to comment.
The CEO’s comments come a day after President Joe Biden was said to be preparing to block the Nippon Steel deal.
There are practical and financial barriers for a Cleveland-Cliffs takeover, among them being antitrust concerns from an increased concentration of domestic steel production in the hands of a single company. Cliffs also is in the midst of acquiring Canadian steelmaker Stelco Holdings Inc. in a $2.8 billion deal.
The potential deals come in the backdrop of falling steel prices, which are down more than 40% this year amid surging Chinese exports and lackluster US demand.
“For now, steel prices are pretty weak and I don’t think that Cliffs will have the wherewithal to be doing that kind of transaction anytime soon, at least easily,” Wolfe Research analyst Timna Tanners said.
US Steel was up 2% to $29.97 a share at 9:25 p.m. in New York.
(Adds reply from Wells Fargo in the third paragraph.)
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