Leading Independent Proxy Advisory Firms ISS and Glass Lewis Recommend U. S. Steel Shareholders Vote “FOR” the Pending Transaction with Nippon Steel Corporation (NSC)
ISS and Glass Lewis Recommendations Reiterate that Transaction Delivers Clear Benefits to U. S. Steel Shareholders
In its
- “There is no doubt that the offer represents a meaningful premium for shareholders resulting from a thorough and competitive sales process. Ultimately, the board chose the certainty of value inherent in an all-cash offer from NSC over a lower cash and stock offer from [Cleveland-Cliffs [(“CLF”)] that, in the board’s view, carried considerable risk in obtaining antitrust approval without significant divestitures – which could in turn jeopardize whether CLF shareholders would approve a potential transaction. The board’s decision is defensible, particularly given the commitments from NSC to obtain necessary regulatory approvals.”
- “The sales process was thorough, shareholders are receiving a sizable premium, there is a potential downside risk of non-approval, and there is certainty of value in NCS’s cash offer.”
In its
- “… we believe the disclosed engagement framework and functionally public solicitation effort appear to have been suitably comprehensive and supportive of obtaining the greatest possible value for USS shareholders.”
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“…we would highlight the following: (i) the deal-implied trailing EBITDA multiple of 6.7x substantially exceeds the Company's stand-alone valuation in the run-up to announcement (approximately 2.55x as of
August 11, 2023 , trailing one-year average of approximately 1.52x as ofAugust 11, 2023 ); the deal-implied forward EBITDA multiple of 8.2x substantially exceeds the Company's stand-alone valuation in the run-up to announcement (approximately 4.06x as ofAugust 11, 2023 , trailing one-year average of approximately 3.28x as ofAugust 11, 2023 ); (iii) the deal-implied trailing EBITDA multiple of 6.7x falls between the median and mean trailing EBITDA multiples derived by Barclays in its review of precedent transactions (6.4x and 6.9x, respectively); and (iv) in absolute terms, the proposed purchase price represents a roughly twelve-year unaffected high for USS investors. Taken together…we thus believe there exists persuasive cause to conclude the proposed all-cash purchase price is attractive here.” - “…as it relates to the political/regulatory element, we believe USS has negotiated adequate procedural safeguards and remedies intended to give the NSC deal the best possible opportunity of securing necessary approvals…”
U. S. Steel issued the following statement in response:
“We are pleased that ISS and Glass Lewis support our Board’s unanimous recommendation that shareholders vote “FOR” our pending transaction with Nippon Steel. Through increased financial investment and NSC’s contribution of advanced technologies, Nippon Steel will advance American priorities by driving greater quality and competitiveness for customers in the critical industries that rely on American steel while strengthening American supply chains. Importantly, U. S. Steel will retain its headquarters in
U. S. Steel shareholders of record at the close of business on
U. S. Steel shareholders who need assistance in completing the proxy card, need additional copies of the proxy materials or have questions regarding the upcoming special meeting should contact U. S. Steel’s proxy solicitor:
Toll Free: (877) 825-8621 (from the
(412) 232-3651 (from other locations)
About U. S. Steel
Founded in 1901,
Additional Information and Where to Find It
This communication relates to the proposed transaction between the
The Company’s stockholders will be able to obtain free copies of the definitive Proxy Statement, as well as other documents containing important information about the Company, NSC and the proposed transaction once such documents are filed with the
Participants in the Solicitation
NSC, the Company and their directors, and certain of their executive officers and employees may be deemed to be participants in the solicitation of proxies from the Company’s stockholders in respect of the proposed transaction. Information regarding the directors and executive officers of the Company who may, under the rules of the
Forward-Looking Statements
This communication contains information regarding the Company and NSC that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, statements expressing general views about future operating or financial results, operating or financial performance, trends, events or developments that we expect or anticipate will occur in the future, anticipated cost savings, potential capital and operational cash improvements and changes in the global economic environment, the construction or operation of new or existing facilities or capabilities, statements regarding our greenhouse gas emissions reduction goals, as well as statements regarding the proposed transaction, including the timing of the completion of the transaction. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts, but instead represent only the Company’s beliefs regarding future goals, plans and expectations about our prospects for the future and other events, many of which, by their nature, are inherently uncertain and outside of the Company’s or NSC’s control. It is possible that the Company’s or NSC’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management of the Company or NSC, as applicable, believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s or NSC’s historical experience and our present expectations or projections. Risks and uncertainties include without limitation: the ability of the parties to consummate the proposed transaction on a timely basis or at all; the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement and plan of merger relating to the proposed transaction (the “Merger Agreement”); the possibility that the Company’s stockholders may not approve the proposed transaction; the risks and uncertainties related to securing the necessary stockholder approval; the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; certain restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the Company’s common stock or NSC’s common stock or American Depositary Receipts; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company or NSC to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, stockholders and other business relationships and on its operating results and business generally; and the risk the pending proposed transaction could distract management of the Company. The Company directs readers to its Quarterly Report on Form 10-Q for the quarter ended
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Media Contacts:
Senior Vice President, Chief Communications Officer, U. S. Steel
T- 412-433-1300
E- media@uss.com
T- 212-895-8600
Investor Relations Officer, U. S. Steel
T – (412) 618-9554
E – ecchieng@uss.com
T - 212.750.5833
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