AK Steel Trumps US Steel for Bankrupt National Steel

AK Steel Holding Corp. has offered $825 million in cash for the assets of bankrupt National Steel Corp., countering a $750 million bid made by United States Steel Corp. earlier this month.

AK Steel, based in Middletown, Ohio, said the offer, which includes the assumption of $200 million of liabilities, is contingent upon regulatory and bankruptcy court approvals.

The bid, which does not include the assumption of pension and other post-retirement employee benefits, also "contemplates" negotiation of a new contract with the United Steelworkers of America union, according to AK Steel.

U.S. Steel's offer for National came just three days after International Steel Group made a $1.5 billion offer, complete with a precedent-setting low-cost labor contract, for bankrupt Bethlehem Steel Corp.

National has been operating since March of 2002 as a debtor-in-possession under Chapter 11 of the Bankruptcy Code. AK Steel said it will seek, in a hearing on January 30, to have the bankruptcy court declare it the lead bidder in the competitive bidding process for National's assets.

"This represents a superior bid for the assets of National Steel and a strategic acquisition for AK Steel," said Richard Wardrop, Jr., chairman and CEO of AK Steel.

National Steel, headquartered in Mishawaka, Indiana, filed a voluntary petition under Chapter 11 of the Bankruptcy Code in March of 2002, but has continued to operate its facilities. National operates steel producing and finishing facilities in Indiana, Illinois and Michigan.