It’s a safe bet that someone will be buying steelmaker U.S. Steel (NYSE:X) before too much longer. The question remains, however, just who will actually sign the checks and get the deeds? We know that the process is advancing, but the latest developments suggest it’s a bit farther along than you might expect. As a result, shares are up in Tuesday afternoon’s trading session.
The latest reports note that U.S. Steel is currently reviewing “multiple” buyout offers. Right now, two such offers have emerged that we know of. One is from Cleveland-Cliffs (NYSE:CLF), which U.S. Steel recently rejected, and the other is from Esmark, which Esmark itself withdrew following issues with the union at U.S. Steel. However, even as these developments played out, U.S. Steel noted that it had the multiple offers in question and was already sharing out “due diligence information” with said buyers. We do know that ArcelorMittal (NYSE:MT) is still in the hunt, though it may not yet have advanced to a formal offer.
U.S. Steel refers to this in internal communications as “value maximization work” and notes that it’s working on “…running a fair and competitive process to maximize stockholder value and mitigate transaction execution risk.” Still, once a buyer does ultimately emerge, it’s a safe bet that the government will have something to say on the matter, as it’s had something to say about several similar matters in recent memory.
Analysts look for a sale, too, and expect that investors should do the same. A combination of four Hold and three Sell ratings make U.S. Steel a Moderate Sell-rated stock. Further, U.S. Steel stock comes with 24.82% downside risk thanks to its average price target of $23.05.
