© Reuters. FILE PHOTO: Steel workers at U.S. Steel Granite City Works in Granite City, Illinois, U.S., May 24, 2018. REUTERS/Lawrence Bryant/File Photo
By David Carnevali
NEW YORK (Reuters) -Esmark Inc majority owner and chief executive James Bouchard said in an interview on Tuesday that his steelmaker, which does not publicly report its earnings, has cash for its $7.8 billion bid for U.S. Steel Corp sitting in his bank account.
Esmark unveiled its offer on Monday after Cleveland-Cliffs (NYSE:) Inc, another steelmaker, said on Sunday it had made a $7.3 billion offer for U.S. Steel, which the latter rejected. Cleveland-Cliffs said it could afford the deal because it would pay for half of it using its own stock as currency and borrow from banks to help pay for the other half.
Bouchard said he had $10 billion available and Esmark itself had no debt. “I got $10 billion in cash in my bank account,” Bouchard said. He did not provide more details to verify he has access to the cash.
Bouchard added he was being advised on his offer for U.S. Steel by an “international bank” he declined to name, which was also willing to lend to him.
A spokesperson for U.S. Steel said Esmark could pursue it by participating in a process it announced on Sunday for exploring a potential deal with interested parties.
“This is the first that we have heard from Esmark. We welcome them to join the multiple parties already in our previously announced strategic alternatives process,” the U.S. Steel spokesperson said.
Bouchard, a former U.S. Steel executive, said Esmark was “the third largest steelmaker in the country”, without elaborating with any figures.
In 2008, he sold another company of his with the same name to Russian steelmaker OAO Severstal for $1.3 billion. He subsequently bought back the Esmark name, trademark and intellectual property to create his latest steelmaker, which he says generates over $500 million in annual revenue.