Essar Steel Holdings Limited (Essar), on Friday said that the company has informed the Esmark board of directors that it was ready to consider a potential increase to its April 30, 2008 offer to acquire Esmark Inc at $17 per share. Essar also said that it would consider making an increased bid after it had obtained additional information from Esmark.
The company in a statement further said, ?Following Esmark?s acceptance of Essar?s offer on April 30, 2008, Essar entered into a memorandum of agreement with Esmark to acquire Esmark Inc. at an estimated enterprise value of $ 1.1 billion which includes a proposed tender offer for a cash purchase price of $17 per share of all outstanding shares of the Nasdaq listed steel company.
Simultaneously, at Esmark?s request, Essar also immediately extended a $110 million loan to Esmark, which helped the company address a potential default. As part of the acquisition strategy, Essar has also proposed a capital expenditure program of $525 million for Esmark?s Ohio and West Virginia manufacturing facilities over the next five years, the company said.
Essar, on the invitation of Esmark and UBS, the firm?s financial advisors, participated in a bidding process for the sale of Esmark shares. After following all legal procedures and a transparent bid process, Essar?s offer was unanimously accepted by the Esmark Board.
