Leading Independent Proxy Advisory Firms ISS and Glass Lewis Recommend U. S. Steel Shareholders Vote “FOR” the Pending Transaction with Nippon Steel Corporation (NSC)
March 29, 2024
Lectura de 9 minutos
ISS and Glass Lewis Recommendations Reiterate
that Transaction Delivers Clear Benefits to U. S. Steel
Shareholders
PITTSBURGH--(BUSINESS WIRE)-- United States Steel Corporation
(NYSE: X) (“U. S. Steel”) today announced that leading independent
proxy advisory firms Institutional Shareholder Services (“ISS”) and
Glass Lewis & Co. (“Glass Lewis”) have recommended that U. S.
Steel shareholders vote “FOR” the pending transaction with Nippon
Steel Corporation (“NSC”) (TSE: 5401) at the upcoming special meeting
on April 12, 2024.
In its March 27, 2024 report, ISS stated:
“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 March 27, 2024 report, Glass Lewis stated:
“… 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.” “…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
of August 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 of August 11,
2023, trailing one-year average of approximately 3.28x as of August
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 Pittsburgh,
Pennsylvania and together with NSC will bolster and grow U. S. Steel
in the U.S. market in a way that prioritizes our talented employees
and union members. This transaction combines two companies with
world-leading technologies and manufacturing capabilities to better
serve our customers in the United States and globally and provide our
shareholders with the opportunity to realize certain and immediate
value at a 142% premium compared to the last day of trading before the
strategic alternatives process was announced.”
U. S. Steel shareholders of record at the close of business on
March 4, 2024 will be entitled to vote at the special meeting,
including by submitting a proxy in advance of the meeting.
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:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
Barclays Capital Inc., Goldman Sachs & Co. LLC and Evercore
are serving as financial advisors to U. S. Steel. Milbank LLP and
Wachtell, Lipton, Rosen & Katz are acting as legal advisors.
About U. S. Steel
Founded in 1901, United States Steel Corporation is a leading
steel producer. With an unwavering focus on safety, the Company’s
customer-centric Best for All® strategy is advancing a more secure,
sustainable future for U. S. Steel and its stakeholders. With a
renewed emphasis on innovation, U. S. Steel serves the automotive,
construction, appliance, energy, containers, and packaging industries
with high value-added steel products such as U. S. Steel’s proprietary
XG3® advanced high-strength steel. The Company also maintains
competitively advantaged iron ore production and has an annual raw
steelmaking capability of 22.4 million net tons. U. S. Steel is
headquartered in Pittsburgh, Pennsylvania, with world-class operations
across the United States and in Central Europe. For more information,
please visit www.ussteel.com .
Additional Information and Where to Find It
This communication relates to the proposed transaction between
the United States Steel Corporation (the “Company”) and Nippon Steel
Corporation (“NSC”). In connection with the proposed transaction, the
Company has filed and will file relevant materials with the United
States Securities and Exchange Commission (“SEC”), including the
Company’s proxy statement on Schedule 14A (the “Proxy Statement”), a
definitive version of which was filed with the SEC on March 12, 2024.
The Company commenced disseminating the definitive Proxy Statement to
stockholders of the Company on or about March 12, 2024. The Company
may also file other documents with the SEC regarding the proposed
transaction. This communication is not a substitute for the Proxy
Statement or for any other document that may be filed with the SEC in
connection with the proposed transaction. The proposed transaction
will be submitted to the Company’s stockholders for their
consideration. BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S
STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED OR TO BE
FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT (A DEFINITIVE FILING
OF WHICH HAS BEEN MADE WITH THE SEC), AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY, NSC AND THE PROPOSED TRANSACTION.
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 SEC, without
charge, at the SEC’s website (www.sec.gov ). Copies of the Proxy Statement and
the other documents filed with the SEC by the Company can also be
obtained, without charge, by directing a request to United States
Steel Corporation, 600 Grant Street, Suite 1884, Pittsburgh,
Pennsylvania 15219, Attention: Corporate Secretary; telephone
412-433-1121, or from the Company’s website www.ussteel.com .
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 SEC,
be deemed participants in the solicitation of the Company’s
stockholders in connection with the proposed transaction, including a
description of their direct or indirect interests, by security
holdings or otherwise, is set forth in the Proxy Statement, a
definitive version of which was filed with the SEC on March 12, 2024.
Information about these persons is included in each company’s annual
proxy statement and in other documents subsequently filed with the
SEC, and was included in the definitive version of the Proxy Statement
filed with the SEC. Free copies of the Proxy Statement and such other
materials may be obtained as described in the preceding paragraph.
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 September 30, 2023 and Form 10-K for
the year ended December 31, 2023, and the other documents it files
with the SEC for other risks associated with the Company’s future
performance. These documents contain and identify important factors
that could cause actual results to differ materially from those
contained in the forward-looking statements. Risks related to NSC’s
forward-looking statements include, but are not limited to, changes in
regional and global macroeconomic conditions, particularly in Japan,
China and the United States; excess capacity and oversupply in the
steel industry; unfair trade and pricing practices in NSC’s regional
markets; the possibility of low steel prices or excess iron ore
supply; the possibility of significant increases in market prices of
essential raw materials; the possibility of depreciation of the value
of the Japanese yen against the U.S. dollar and other major foreign
currencies; the loss of market share to substitute materials; NSC’s
ability to reduce costs and improve operating efficiency; the
possibility of not completing planned alliances, acquisitions or
investments, or such alliances, acquisitions or investments not having
the anticipated results; natural disasters and accidents or
unpredictable events which may disrupt NSC’s supply chain as well as
other events that may negatively impact NSC’s business activities;
risks relating to CO2 emissions and NSC’s challenge for carbon
neutrality; the economic, political, social and legal uncertainty of
doing business in emerging economies; the possibility of incurring
expenses resulting from any defects in our products or incurring
additional costs and reputational harm due to product defects of other
steel manufacturers; the possibility that we may be unable to protect
our intellectual property rights or face intellectual property
infringement claims by third parties; changes in laws and regulations
of countries where we operate, including trade laws and tariffs, as
well as tax, environmental, health and safety laws; and the
possibility of damage to our reputation and business due to data
breaches and data theft. All information in this communication is as
of the date above. Neither the Company nor NSC undertakes any duty to
update any forward-looking statement to conform the statement to
actual results or changes in the Company’s or NSC’s expectations
whether as a result of new information, future events or otherwise,
except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240329957310/en/
Media Contacts: Tara Carraro
media@uss.com
Kelly Sullivan / Ed Trissel
Emily Chieng ecchieng@uss.com
Scott Winter / Gabrielle Wolf
Source: United States Steel Corporation