Esmark emerges as second bidder for US Steel

Sewickley, Pennsylvania-based flat-rolled steel service center Esmark Inc. has announced a voluntary public cash and exchange offer for all issued and outstanding shares of Pittsburgh-based U.S. Steel Corp.

The disclosure of the offer comes one day after Cleveland-based steel producer Cleveland-Cliffs went public with its offer for U.S. Steel. While that offer initially was met with rejection from the U.S. Steel CEO, several hours later, U.S. Steel invited Cleveland-Cliffs to be part of a “strategic alternatives process” it was undertaking.

Esmark's initial offer period runs from Aug. 14 to Nov. 30 but could be extended. Esmark Steel Group is a processor and distributor of value-added flat-rolled steel, describing itself as the third-largest U.S. producer of tinplate steel.

“With more than 40 years of steel industry experience, and as a former executive and statutory representative of U.S. Steel, I have significant intimacy with the steel business in the U.S. and around the globe,” Esmark CEO James P. Bouchard says.

Bouchard also points to his experience as an executive committee member of the American Iron and Steel Institute (AISI) and the European Steel Association (Eurofer). His current titles are as forever chairman and CEO of Esmark/Wheeling Pittsburgh Steel, whose stock formerly was traded on the Nasdaq exchange.

“This is an exciting time as the entire American steel industry is restructuring, and with Esmark’s long-standing history of excellence, we are anxious to continue to grow and we’re well positioned to come in and operate," Bouchard says.

Prior to founding Esmark in 2003, Bouchard was an executive with U.S. Steel in Europe as a member of the executive team that U.S. Steel dispatched to Kosice, Slovakia, after having acquired the Slovakian National Steel Company (VSZ).

According to Esmark, the Kosice operation became the most profitable steel asset owned by U.S. Steel at that time.

In addition to his activities with Esmark and U.S. Steel, Bouchard formed the Bouchard Group in 1995 with an initial $500 investment. The Bouchard Group, according to Esmark, has grown and evolved into “a diversified venture capital investment holding company with strategic assets engaged in the industrial, energy, technology, real estate, commodities industries and youth sports and development.”

In 2003, Esmark and the Bouchard Group acquired two Chicago-area steel services companies, Electric Coating Technologies and Sun Steel. Bouchard subsequently transferred his Bouchard Group steel assets and capitalized Esmark in 2004, referrring to that iteration as Esmark II.

In 2007, Esmark says it completed the first hostile tender/reverse merger in the history of the U.S. with the merger of Wheeling Pittsburgh Steel Corp. and Esmark II.

Esmark subsequently sold Wheeling-Pitt and the Esmark II iteration of the company to Russia-based OAO Severstal for $1.3 billion in August 2008.

“Bouchard, through the Bouchard Group, later repurchased the Esmark name, trademark and intellectual property from OAO Severstal and brought the Esmark name and respective brand back to life for a third time when he founded Esmark Inc. III in October of 2008 with no revenue and one employee,” the company says.

Bouchard’s brother, Craig T. Bouchard, became familiar to the metals recycling sector with his involvement in the proposed Braidy aluminum project in Kentucky.

That proposed $1.3 billion project, which claimed it would have included recycling as a major component, went through a name change and never reached the construction phase before suffering in part from a series of accusations and counter-accusations among executives and investors, including Craig Bouchard. (Craig Bouchard later emerged attached to a space railway company.)

The ill-fated aluminum industry venture attracted Russia-based En+ Group, which is affiliated with Russian aluminum producer Rusal Group, as one of its only major potential investors, along with the state of Kentucky.