US Steel rises as Cliffs CEO says still interested

(Bloomberg) — Shares of United States Steel Corp. rose in after-hours trading after the CEO of Cleveland-Cliffs Inc. said it is still in the market for its rival’s assets.

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“Absolutely,” Cliffs Chief Executive Lourenco Goncalves told CNBC on Thursday when asked if he would bid for US Steel’s assets if Nippon Steel Corp.’s takeover bid. of 14.1 billion dollars will fail. “We’re good at going after the money.”

Goncalves told the network he is working with investment banks JPMorgan Chase & Co. and Wells Fargo & Co. to a plan. US Steel, Cleveland Cliffs and JP Morgan did not immediately respond to a request for comment. Wells Fargo declined to comment.

The CEO’s comments come a day after President Joe Biden was said to be preparing to block the Nippon Steel deal.

There are practical and financial barriers to taking over Cleveland-Cliffs, including antitrust concerns over the increased concentration of domestic steel production in the hands of a single company. Cliffs is also in the midst of acquiring Canadian steelmaker Stelco Holdings Inc. in a $2.8 billion deal.

The potential deals come amid falling steel prices, which have fallen more than 40 percent this year amid rising Chinese exports and weak U.S. demand.

“Steel prices are pretty weak right now, and I don’t think Cliffs will have the wherewithal to do these kinds of deals anytime soon, at least easily,” said Wolfe Research analyst Timna Tanners.

US Steel rose 2 percent to $29.97 a share at 9:25 p.m. in New York.

(Add response from Wells Fargo in third paragraph.)

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