US Steel chiefs remain confident that they will be able to secure the acquisition of the Košice-based steel manufacturer VSŹ, despite a rival bid from the global giant ISPAT.
The claim comes amid a furore over the release of figures in the Slovak media concerning a rival bid for VSŽ from one of the largest steel producers in the world, the Indian firm ISPAT, figures which US Steel claims are misleading.
"Let them speak for themselves. We see them very much as a rejected suitor arriving at the wedding and proposing to the bride," US Steel spokesman Tomas Ferrall told The Slovak Spectator July 20. "We are confident that this deal is pretty much done and that we will get ownership of VSŽ," he added. "US Steel's offer is certainly the better of the two."
Ferrall added that despite recent delays in the finalisation of the deal, the company would be in US Steel hands by fall, with a final closure of the sale on August 31 after a shareholders meeting probably in mid August.
"We'll have the keys to the car in August and we'll be in control in October," Ferrall added.
ISPAT, which has argued that its global presence with operations in Germany, Ireland, Mexico, France, Belgium, Canada and the US make it a more suitable partner for the Košice steelmaker, has tried to take advantage of the recent hold up in completion of the deal.
A spokeswoman for the firm told The Slovak Spectator that while they would not comment on the figures reported in the Slovak media, a report carried by the Financial Times - citing a bid involving an initial payment to shareholders of $120 million and a further $100 million - was close to what ISPAT had actually tabled. US Steel's offer involves a $60 million cash pay-out now and a second one of between $25 and $75 million in 2002-2003 dependent upon the performance of VSŽ.
"Our offer is higher than that of US Steel and is more attractive to [VSŽ] shareholders," said ISPAT spokeswoman Annanya Sarin. "The government is aware of our offer and we are still and have always been interested in VSŽ," she added.
ISPAT's offer includes VSŽ non-core businesses and holdings that US Steel is not seeking, and also involves the 50% share the Slovak steelmaker holds in a joint venture with US Steel established in 1998 for production of hot-rolled steel. However, legally, US Steel has first refusal on VSŽ's share in the joint venture.
"This means that if you take out the money involved in buying that [the VSŽ share in the joint venture], although legally it's not for sale, and then the money for some of these other things [non-core operations] we aren't taking, the [ISPAT] offer actually comes down quite a bit," said Ferrall.
Under its offer for VSŽ, US Steel would take over VSŽ's current core steelmaking operations and form a new company which it would solely own. The renewed interest in ISPAT's bid came after US Steel admitted there had been a delay in its finalising of the deal.
However, Ferrall said that these delays would soon be resolved. "We are close to a final agreement and have gone to the execution stages now. There are a few issues remaining, including one tax issue that is close to being solved, and we've made great progress with the creditor banks, but there are just a few technical details left," he said.
The US giant has had its exclusive negotiation rights with VSŽ extended "for a period of time sufficient to allow US Steel to take ownership of the firm," Ferrall said.