By Esmark Inc. and its former chief executive officer have settled charges brought on by the US Securities and Exchange Commission for publicly announcing an offer to buy United States Steel Corp. without having the financial means to back the bid.
The company and Bouchard agreed to pay civil penalties of $500,000 and $100,000 respectively, without admitting or denying the SEC charges, according to a statement on Friday.
The steel distributor surprised the market in August 2023 by offering to buy US Steel for $7.8 billion in cash, one day after Cleveland-Cliffs Inc.’s $7.25 billion bid which was rejected by the target company. Esmark’s then-CEO James P. Bouchard told Bloomberg News at the time that the company had available cash on hand to fund the offer.
Bouchard also said in a television interview at the time that Esmark had $10 billion available in cash committed to the deal and wouldn’t put up any of Esmark’s assets as collateral, according to an SEC statement on Friday.
Less than two weeks later, Esmark said in a statement that it wouldn’t participate in the purchase process for US Steel, citing union support for the rival bid from Cleveland-Cliffs.
The SEC finds that the statements Bouchard made “were false because Esmark did not have the $7.8 billion in cash required to complete the purchase of US Steel, and, therefore, Esmark and Bouchard did not have a reasonable belief that they would have the means to purchase the securities needed to complete the announced tender offer for US Steel,” according to the statement.
Discover more from NewsBreakers
Subscribe to get the latest posts sent to your email.
What's your reaction?
