Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs”) and AK Steel
Holding Corporation (NYSE: AKS) (“AK Steel”) today announced that,
in connection with the previously announced tender offers (each, a
“Tender Offer” and, collectively, the “Tender Offers”) by Cliffs
and consent solicitations (each, a “Consent Solicitation” and,
collectively, the “Consent Solicitations”) by AK Steel Corporation,
a wholly owned subsidiary of AK Steel, the requisite consents have
been received to adopt the proposed amendments (the “Amendments”)
to the indentures (collectively, the "AK Steel Indentures")
governing the 7.625% Senior Notes due 2021 and 7.50% Senior Secured
Notes due 2023 (collectively, the “AK Steel Notes”) issued by AK
Steel Corporation. As a result, AK Steel Corporation and the
trustee under the AK Steel Indentures (the “AK Steel Trustee”) will
promptly execute supplemental indentures to the AK Steel Indentures
to effect the Amendments. As previously announced, Cliffs and AK
Steel have entered into an Agreement and Plan of Merger, dated
December 2, 2019 (as it may be amended, the “Merger Agreement”),
providing for, among other things and subject to the satisfaction
or (to the extent lawful) waiver of certain conditions set forth
therein, the acquisition of AK Steel by Cliffs by way of the merger
of a wholly owned subsidiary of Cliffs with and into AK Steel (the
“Merger”), with AK Steel surviving the Merger as a wholly owned
subsidiary of Cliffs.
The Amendments will not become operative unless and until the
following conditions are satisfied or otherwise waived, if
applicable, by Cliffs or AK Steel Corporation: (i) the AK Steel
Notes that are validly tendered (and not validly withdrawn) in the
Tender Offers have been accepted for purchase by Cliffs in
accordance with the terms of the offer to purchase and consent
solicitation statement, dated February 26, 2020 (as amended to
date, the “Statement”) and (ii) the other conditions to the Consent
Solicitations, including the consummation of the Merger, have been
satisfied.
Holders of AK Steel Notes (“Holders”) may not deliver consents
to the Amendments in a Consent Solicitation without tendering AK
Steel Notes in the applicable Tender Offer, and may not tender AK
Steel Notes in a Tender Offer without delivering consents to the
Amendments in the applicable Consent Solicitation. The consent
results are based on early tenders in the Tender Offers, which
tenders are deemed also to constitute the delivery of consents in
the Consent Solicitations made by AK Steel Corporation to adopt the
Amendments.
As of 5:00 p.m., New York City time, on March 10, 2020 (the
“Early Participation Deadline”), according to Global Bond Services
Corporation, the Depositary and Information Agent for the Tender
Offers and the Consent Solicitations, the principal amounts of AK
Steel Notes set forth in the table below had been validly tendered
and not validly withdrawn (and consents thereby deemed validly
given and not validly revoked) in the Tender Offers and the Consent
Solicitations.
Title of Series/CUSIP Number
of AK Steel Notes
Aggregate Principal
Amount Outstanding
AK Steel Notes Tendered and
Consents Delivered at Early Participation Deadline
AK Steel Notes Tendered and
Consents Delivered at Early Participation Deadline
Principal Amount
Percentage
7.625% Senior Notes due 2021 / 001546
AS9
$406,200,000
$364,200,000
89.66%
7.50% Senior Secured Notes due 2023 /
001546 AT7
$380,000,000
$310,658,000
81.75%
Holders that validly tendered (and did not withdraw) on or prior
to the Early Participation Deadline and whose AK Steel Notes are
accepted for purchase will receive the “Total Consideration” (as
defined in the Statement) for their AK Steel Notes, subject to the
terms contained in the Statement. The Total Consideration includes
the early participation payment for the AK Steel Notes of $50 per
$1,000 principal amount of AK Steel Notes validly tendered and
accepted for purchase. Because each Tender Offer and Consent
Solicitation is subject to the satisfaction of, among other things,
the consummation of the Merger, Holders will not receive the Early
Participation Payment (as defined in the Statement) unless the
Merger is consummated. The Total Consideration, plus accrued and
unpaid interest from the last interest payment date with respect to
the applicable series of AK Steel Notes, up to, but not including,
the Early Settlement Date (as defined in the Statement), with
respect to AK Steel Notes that have been validly tendered and not
validly withdrawn on or before the Early Participation Deadline and
accepted for purchase will be paid by Cliffs on the Early
Settlement Date. The Early Settlement Date will be the business day
Cliffs selects promptly following the Early Participation Deadline
and the satisfaction or waiver of the conditions to consummation of
the Tender Offers and the Consent Solicitations, including the
consummation of the Merger, which is expected to occur on March 13,
2020.
Because the Withdrawal Deadline (as defined in the Statement)
has passed, tendered AK Steel Notes (and the related delivered
consents) may no longer be withdrawn.
Cliffs and AK Steel Corporation are making the Tender Offers and
the Consent Solicitations pursuant to the terms of and subject to
the conditions set forth in the Statement. The terms of the Tender
Offers and the Consent Solicitations remain as set forth in the
Statement.
The Tender Offers are scheduled to expire at 12:01 a.m., New
York City time, on March 25, 2020, unless such date is extended.
Cliffs and AK Steel Corporation reserve the right to terminate,
withdraw, amend or extend the Tender Offers and Consent
Solicitations as described in the Statement.
Cliffs has engaged Credit Suisse as Dealer Manager and
Solicitation Agent for the Tender Offers. Copies of the Statement
may be obtained from Global Bondholder Services Corporation, the
Depositary and Information Agent, by phone at (866) 924-2200
(toll-free) or (212) 430-3774 (collect for banks and brokers).
Please direct questions regarding the Tender Offer to Credit Suisse
at (800) 820-1653 (toll-free) or (212) 538-1862 (collect for banks
and brokers).
About Cleveland-Cliffs
Founded in 1847,
Cleveland-Cliffs is the largest and oldest independent iron ore
mining company in the United States. Cleveland-Cliffs is a major
supplier of iron ore pellets to the North American steel industry
from its mines and pellet plants located in Michigan and Minnesota.
In 2020, Cleveland-Cliffs expects to be the sole producer of hot
briquetted iron (HBI) in the Great Lakes region with the
development of its first production plant in Toledo, Ohio. Driven
by the core values of safety, social, environmental and capital
stewardship, Cleveland-Cliffs’ employees endeavor to provide all
stakeholders with operating and financial transparency.
About AK Steel
AK Steel is a leading producer of flat-rolled carbon, stainless
and electrical steel products, primarily for the automotive,
infrastructure and manufacturing, including electrical power, and
distributors and converters markets. Through its subsidiaries, the
company also provides customer solutions with carbon and stainless
steel tubing products, hot- and cold-stamped components, and die
design and tooling. Headquartered in West Chester, Ohio (Greater
Cincinnati), the company has approximately 9,300 employees at
manufacturing operations in the United States, Canada and Mexico,
and facilities in Western Europe.
Forward-looking Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
In this context, forward-looking statements often address expected
future business and financial performance and financial condition,
and often contain words such as “expect,” “anticipate,” “intend,”
“plan,” “believe,” “estimate,” “would,” “target” and similar
expressions, as well as variations or negatives of these words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
consummation of the proposed Merger and the anticipated benefits
thereof. These and other forward-looking statements reflect AK
Steel’s and Cliffs’ current beliefs and judgments and are not
guarantees of future results or outcomes. Forward-looking
statements are based on assumptions and estimates that are
inherently affected by economic, competitive, regulatory, and
operational risks and uncertainties and contingencies that may be
beyond AK Steel’s or Cliffs’ control.
They are also subject to inherent risks and uncertainties that
could cause actual results or performance to differ materially from
those expressed in any forward-looking statements. Important risk
factors that may cause such a difference include (i) the completion
of the proposed Merger on the anticipated terms and timing,
including obtaining anticipated tax treatment, or at all, (ii)
potential unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, economic performance, indebtedness,
financial condition, losses and future prospects, (iii) the ability
of Cliffs to integrate its and AK Steel’s businesses successfully
and to achieve anticipated synergies, (iv) business and management
strategies for the management, expansion and growth of the combined
company’s operations following the consummation of the proposed
Merger, (v) pending litigation related to the proposed Merger and
potential future litigation that could be instituted against AK
Steel, Cliffs or their respective directors, (vi) the risk that
disruptions from the proposed Merger will harm AK Steel’s or
Cliffs’ business, including current plans and operations, (vii) the
ability of AK Steel or Cliffs to retain and hire key personnel,
(viii) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed Merger, (ix) uncertainty as to the long-term value of
Cliffs’ common stock, (x) continued availability of capital and
financing and rating agency actions, (xi) legislative, regulatory
and economic developments and (xii) unpredictability and severity
of catastrophic events, including acts of terrorism or outbreak of
war or hostilities or public health crises, as well as management’s
response to any of the aforementioned factors. These risks, as well
as other risks associated with the proposed Merger, are more fully
discussed in the joint proxy statement/prospectus that is included
in the Registration Statement (as defined below) filed with the SEC
by Cliffs in connection with the proposed Merger. While the list of
factors presented here is, and the list of factors presented in the
Registration Statement are, considered representative, no such list
should be considered to be a complete statement of all potential
risks and uncertainties. Other factors that may present significant
additional obstacles to the realization of forward-looking
statements or which could have a material adverse effect on AK
Steel’s or Cliffs’ respective consolidated financial condition,
results of operations, credit rating or liquidity are contained in
AK Steel’s and Cliffs’ respective periodic reports filed with the
SEC, including AK Steel’s annual report on Form 10-K and Cliffs’
annual report on Form 10-K. Neither AK Steel nor Cliffs assumes any
obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by applicable law.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or purchase, or the solicitation of an offer to sell
or purchase, or the solicitation of any vote of approval or the
solicitation of tenders or consents with respect to any security.
No offer, solicitation, purchase or sale will be made in any
jurisdiction in which such an offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended. In the case of the Tender Offers and Consent
Solicitations, the Tender Offers and Consent Solicitations are
being made solely pursuant to the Statement and only to such
persons and in such jurisdictions as is permitted under applicable
law.
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MEDIA CONTACT: Patricia Persico Director, Corporate
Communications (216) 694-5316 INVESTOR CONTACT: Paul Finan
Director, Investor Relations (216) 694-6544
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