The Securities and Exchange Commission says that it has reached a settlement with industrial conglomerate Esmark and its chairman for announcing a false tender offer to buy U.S. Steel.
The agency said Friday that in August 2023 Esmark Inc., at the direction and approval of founder, chairman, and former CEO James Bouchard, announced a tender offer to buy U.S. Steel Corp. for $35 per share even though it didn’t have the financial means to complete the offer.
The SEC said that Pittsburgh-based Esmark needed $7.8 billion in cash to consummate the offer but didn’t have the funds.
Bouchard had also appeared on a cable news program in August 2023 and said that Esmark had $10 billion available in cash committed to the deal and would not put up any of its assets as collateral. But the SEC order found that Bouchard’s statements were false because the company didn’t have the necessary cash for the deal.
The agency said that the company and Bouchard, without admitting or denying the SEC’s findings, have agreed to cease and desist from committing or causing any future violations and to pay civil penalties of $500,000 and $100,000, respectively.
Privately held Esmark declined to comment on the matter when contacted by The Associated Press on Friday. Besides its steel-producing and distribution business, Esmark has operations in aviation, oil and gas exploration, real estate and other industries.
For its part, U.S. Steel has agreed to be acquired in December by Japan-based Nippon Steel for about $14 billion in cash, but the pending deal faces significant opposition. Earlier this week the White House signaled that it would block the transaction, in line with the United Steelworkers union who also oppose the deal.
Copyright © 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.
