Essar ready to raise offer for Esmark

The Essar group has expressed its readiness to raise its cash offer to 19 dollars a share for acquiring US steel firm Esmark, for which Russian steel giant Severstal has also made a bid. Essar Steel Holdings informed the Esmark board of directors yesterday that it is providing a notice of its intention to increase the offer to purchase all of the outstanding shares of Esmark, the company said in a statement.

On April 30, Essar had entered into a memorandum of agreement with Esmark to acquire all its outstanding shares for a cash purchase price of 17 dollars a share. In connection with entering into the memorandum of agreement, Essar also extended a 110 million dollars loan to Esmark, which helped the company address a potential default, Essar said in a statement.

Essar8217;s offer, however, was rivalled and matched by Russian steel major OAO Severstal, which also enjoyed the backing of United Steelworkers, a major trade union in the US.