Wheeling-Pittsburgh Corporation and Esmark Incorporated Enter into Merger Agreement
16 Marzo 2007 - 9:10PM
Business Wire
The Boards of Directors for Wheeling-Pittsburgh Corporation
(NASDAQ:WPSC) (�Wheeling-Pitt�) and Esmark Incorporated (�Esmark�)
today jointly announced that they have entered into an agreement to
combine the two companies. Subject to approval by Wheeling-Pitt and
Esmark shareholders, execution of certain agreements such as a
standby purchase agreement for the rights offering, and other
customary regulatory approvals, the transaction is expected to be
completed in the summer of 2007. The agreement to combine
Wheeling-Pitt and Esmark provides for the formation of a new
company, to be called Esmark, Inc. (�New Esmark�). Under the terms
of the combination, existing Wheeling-Pitt shareholders will
receive one share of New Esmark stock for each share of WPSC stock.
Wheeling-Pitt shareholders will also be able to elect to receive on
a pro-rata basis either: (1) a right to purchase, up to $200
million worth of additional New Esmark shares at $19.00 per share;
or (2) a put right allowing shareholders electing that option to
put back to New Esmark a shares of New Esmark stock for $20.00 per
share, subject to a maximum of $150 million. The share purchase
rights and put options must be exercised within 10 days of closing
and both are subject to pro-ration if the elections exceed the
maximum amounts specified. Esmark shareholders will receive 17.5
million New Esmark shares in the aggregate as well as additional
shares in connection with any new equity raised by Esmark prior to
the closing date. The pro rata share purchase rights offer extended
to existing Wheeling-Pitt shareholders provides an opportunity to
invest in New Esmark at $19.00 per share. In addition, terms of the
merger agreement provide that the rights offering will be
back-stopped allowing the Company to raise $200 million. The put
rights offered to existing Wheeling-Pitt shareholders provides
those shareholders choosing that election with some protection
against the prospect of New Esmark stock trading below $20 per
share in the 10 day period after the closing of the merger. On
December 5, 2006, Wheeling-Pitt�s board appointed an independent
committee to review, evaluate and negotiate the merger between
Wheeling-Pitt and Esmark. The independent committee retained its
own legal counsel and internationally recognized investment banking
financial advisors. The independent committee and its advisors
conducted extensive due diligence on Esmark, performed a detailed
review of the Esmark proposal and evaluated the prospect for the
combined company and, at the conclusion of that work, recommended
approval of a proposed transaction. New Esmark will be led by James
P. Bouchard, Chairman of the Board and Chief Executive Officer, and
Craig T. Bouchard will be Vice-Chairman and President. The board
will be comprised of all of the existing Wheeling-Pittsburgh
existing directors, and Esmark will have the right to appoint two
additional directors. It is anticipated that senior management will
be comprised of both existing Wheeling-Pitt and Esmark executives.
Commenting on the approval of the combination by the respective
boards, New Esmark�s Chairman and CEO James P. Bouchard said,
�Today marks an important milestone in our vision to build the most
efficient downstream steel production and distribution company in
the U.S. By blending the mini-mill, service center, converter and
finishing assets of the two companies, we expect to be able offer
our customers across the Midwest a low-cost production and
just-in-time delivery method unrivaled in the domestic steel
industry.� Bouchard noted that the proposed combination could have
not reached this milestone without the full support of the United
Steelworkers of America and believes that the merger is in the best
interests of Wheeling-Pitt�s employees and the Ohio and Monongahela
Valley communities. Craig T. Bouchard, New Esmark�s Vice-Chairman
and President, added, �Once approved by shareholders, the
combination of Wheeling-Pitt and Esmark will result in a company
with a greatly improved capital structure and earnings potential.
We are achieving strong support on Wall Street by supporting our
strategic vision with blue chip investors, the finest mill
partnerships, reconstructing raw material supply relationships, and
assembling a very large customer base. Our goal is to create a
next-generation steel services company poised for growth. The Chair
of the Wheeling-Pitt independent committee, former Birmingham Steel
(now part of Nucor) CEO James A. Todd, said, �The independent
committee conducted a thorough evaluation of Esmark and believes
that a combination with Esmark provides a great opportunity to
build a profitable steel company. We believe that Wheeling-Pitt
will benefit from Jim and Craig Bouchard�s vision to build a model
downstream steel company with a strong customer focus.� The
Independent Committee of Wheeling-Pittsburgh Corporation was
advised by UBS Securities LLC and Buchanan, Ingersoll & Rooney,
PC. Esmark�s merger and advisory team included investment banker
JPMorgan, legal counsel McGuireWoods LLP and communications
consultant, Edelman. In connection with the proposed merger
transaction between Wheeling-Pittsburgh and Esmark, New Esmark
intends to file a registration statement on Form S-4 and related
proxy statement with the SEC. Stockholders of Wheeling-Pittsburgh
and Esmark are urged to read the registration statement, proxy
statement and any other relevant documents filed with the SEC, when
they become available, as well as any amendments or supplements to
those documents, because they will contain important information,
including information on the proposed transaction as well as
participants and their interests in Wheeling-Pittsburgh and Esmark.
Shareholders will be able to obtain a free copy of the registration
statement and related proxy statement, as well as other filings
containing information about Wheeling-Pittsburgh and Esmark, at the
SEC�s website at www.sec.gov. New Esmark, Wheeling-Pitt, Esmark and
their respective directors and executive officers may be deemed
participants in the solicitation of proxies from the stockholders
of Wheeling-Pittsburgh in connection with the proposed transaction.
Information regarding the participants in the proxy solicitation
and their respective interests may be obtained by reading the
registration statement and related proxy statement regarding the
proposed transaction when they become available. This communication
shall not constitute an offer or any securities for sale.
Forward-Looking Statements Cautionary Language This information
contained in this press release contains forward-looking statements
within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. In particular, statements
containing estimates or projections of future operating or
financial performance are not historical facts, and only represent
a belief based on various assumptions, all of which are inherently
uncertain. Forward-looking statements reflect the current views of
management and are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those
described in such statements. These risks and uncertainties
include, among others, factors relating to: (1) the risk that the
businesses of Esmark and Wheeling-Pittsburgh will not be integrated
successfully or such integration may be more difficult,
time-consuming or costly than expected; (2) the ability of New
Esmark, Esmark and Wheeling-Pitt to realize the expected benefits
from the proposed combination, including expected operating
efficiencies, synergies, cost savings and increased productivity,
and the timing of realization of any such expected benefits; (3)
lower than expected operating results for Wheeling-Pitt or for New
Esmark; (4) the risk of unexpected consequences resulting from the
combination; and (5) certain other risks identified in "Item 1A -
Risk Factors" section of the Company's Annual Report on Form 10-K
for the year ended December 31, 2006, and other reports and filings
with the SEC, which identify important risk factors that could
cause actual results to differ from those contained in the
forward-looking statements. In addition, any forward-looking
statements represent Wheeling-Pittsburgh Corporation's views only
as of today and should not be relied upon as representing the
Company's views as of any subsequent date. While
Wheeling-Pittsburgh Corporation may elect to update forward-looking
statements from time to time, the Company specifically disclaims
any obligation to do so. About Wheeling-Pittsburgh Corporation
Wheeling-Pittsburgh is a steel company engaged in the making,
processing and fabrication of steel and steel products using both
integrated and electric arc furnace technology. The Company
manufactures and sells hot-rolled, cold-rolled, galvanized,
pre-painted and tin millsheet products. The Company also produces a
variety of steel products including roll formed corrugated roofing,
roof deck, floor deck, bridge form and other products used
primarily by the construction, highway and agricultural markets.
About Esmark Headquartered in Chicago and founded by the Bouchard
Group, Esmark is a steel services family of companies. The mission
of Esmark is to establish the benchmark standards for strategic
consolidation, operating efficiency and management excellence in
the steel sector. More information about Esmark can be found at
www.esmark.com.
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