Esmark Calls Severstal Offer Inferior

MORGANTOWN, West Virginia — Steel producer and distributor Esmark rejected a $670 million takeover offer from Severstal on Thursday, calling it an inadequate and inferior bid.

Esmark's announcement came 24 hours after India's Essar Steel Holdings sweetened the pot by $80 million, raising its bid to $19 per share, or $750 million.

While Esmark's management had endorsed Essar's initial bid in late April, the United Steelworkers union partnered with Severstal on a counteroffer.

A statement from Esmark's board said it was not convinced that Severstal could close the deal. The board also decided Severstal's offer was not in the best interests of shareholders and urged them not to sell their shares to the metals and mining company.

"We continue to invite bidders, including Severstal, to provide a superior proposal to that of Essar," said James Bouchard, Esmark's chairman and chief executive. Severstal representatives did not immediately comment.