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Severstal Collides with Ukrainians in America
After running up against the Indian Essar when trying to acquire Esmark, Inc., Severstal may lose another asset in the United States. Shareholders in WCI Steel have gone to court to block the deal struck in May to sell 100 percent of its shares to Severstal for $140 million. Those shareholders say that the company's board of directors should have recommended that they accept a competing offer from Optima International of Miami, Inc., which is part of the Ukrainian Privat Group of Evraz co-owners Igor Kolomoisky and Gennady Bogolyubov.
The WCI shareholders who filed suit control no more than 18 percent of the company’s shares. Bloomberg reports that Optima International of Miami offered $172 million for the company. A source in Privat says that the initiators of the court action are acting in the interests of Privat. No claims are made against the Russian company in the suit.
Severstal encountered similar problems in 2003, when it tried to obtain the bankrupt American steelmaker Rouge Industries, which was later renamed Severstal North America. After Severstal obtained the support of the unions, shareholders raised the price of the company by 40 percent when a competing offer emerged. Severstal was able to acquire the company by paying only 7 percent more, however.
In the current situation, the shareholders filing suit will succeed only if they are able to show prejudicial action on the part of the management of WCI in favor of Severstal and a deliberate attempt to influence the decision of the shareholders. The suit could delay the finalization of the deal by six months, if the sides do not settle out of court.
www.kommersant.com
All the Article in Russian as of June 19, 2008
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