Essar may increase $17-per-share offer for Esmark

By Lisa Kerner

Charlotte, N.C., June 6 - Essar Steel Holdings Ltd. said it is ready to consider upping its $17-per-share offer for Esmark Inc.

In a letter to Esmark's board of directors, Essar asked for information on any arrangements or understanding that OAO Severstal may have had with Franklin Mutual Advisers, LLC, Esmark's largest shareholder.

Essar also urged the board to recognize its continuing obligations under the companies' April 30 memorandum of agreement, an Essar news release stated.

On June 5, Franklin Mutual Advisers announced it would tender all of its 23,740,689 shares, or 60.1%, of Esmark into Severstal's tender offer for the company.

In a schedule 13D filing with the Securities and Exchange Commission, Franklin Mutual cited its May 21 letter to Esmark's board of directors urging the company to merge with Severstal rather than Essar.

While Essar and Severstal both offered $17 per share for Esmark, the United Steelworkers supports the Severstal deal and rejected Essar's offer, Franklin Mutual Advisers noted.

It was previously reported that the offer from Severstal, a Moscow-based metals and mining company, is not contingent on financing, and Severstal expects to consummate the deal within 40 days after entering into a merger agreement.

Esmark is a Wheeling, W.Va., steel producer.

Essar Steel, a flat carbon steel manufacturer based in Essar, India, offered on April 30 to buy Esmark for $670 million.

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