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SEC settles with Esmark, Bouchard over 'false' $7.8B offer for USS

Written by Ethan Bernard & Michael Cowden

September 6, 2024

The US Securities and Exchange Commission (SEC) has settled charges against Esmark and company founder, chairman, and former CEO James P. Bouchard regarding an offer to buy U.S. Steel.

Recall that the Sewickley, Pa.-based service center on Aug. 14 2023, proposed buying all outstanding shares of the Pittsburgh-based steelmaker for $35 each, or $7.8 billion.

“The following day, Bouchard appeared on a cable news program and said that Esmark had $10 billion available in cash committed to the deal and would not put up any of Esmark’s assets as collateral,” the SEC said in a statement on Friday.

Esmark didn’t have the cash to make the deal. And its public statements were therefore false, the SEC said.

“Bouchard and Esmark could not have completed the tender offer for U.S. Steel that they announced,” Antonia M. Apps, director of the SEC’s New York regional office, said in the statement.

“Investors should be able to trust companies’ and executives’ public statements,” she added.

The SEC found that Esmark and Bouchard violated Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-8 thereunder.

Esmark and Bouchard, without admitting or denying the SEC’s findings, agreed to cease and desist from future violations. They also agreed to pay civil penalties of $500,000 and $100,000, respectively.

Recall that Bouchard at the time of the proposed acquisition was chairman and CEO of Esmark. He stepped down from the CEO role last November but continues on as chairman.

A request for comment from Esmark was not returned by time of publication.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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Michael Cowden

Michael Cowden is managing editor for Steel Market Update. Cowden has covered the steel industry since 2007. He has since 2014 specialized in flat-rolled steel but has previously reported on steel long products, steel pipe and tube as well as aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago - where he was involved in launching AMM's daily hot-rolled coil index, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.

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