New York: Russian steel giant Severstal, which has rivalled the Ruia family-led Essar group’s takeover bid for US firm Esmark, has charged the target company of having “tipped the scales” in favour of a deal with the Indian suitor.
Disappointed over the Esmark board’s recommendation to reject Severstal’s offer, the Russian firm said in a letter to Esmark CEO James Bouchard, “Notwithstanding your negative recommendation, Severstal intends to continue with its plans for a transaction with Esmark.”
The Russian steel major has also alleged that the “poison pill” adopted by Esmark board last week was structured to benefit Essar’s offer. A poison pill is a shareholder rights agreement that is generally intended to prevent a hostile takeover of the company.
The Russian firm reiterated its claim to be “best positioned” to strengthen and grow Esmarks current assets.
Severstal also said its offer provided compelling value for the shareholders “through a transaction that can actually be realized,” as compared to the proposed deal with Essar that “cannot realistically be consummated, and, thus, will not deliver value” to Esmark’s shareholders.