Ak Shares Surge on Takeover Report

By TERRY KINNEY, Associated Press writer

CINCINNATI – Shares in AK Steel Holding Corp. soared 15 percent in early trading Tuesday after a report that ArcelorMittal, the world’s largest steelmaker, was considering a takeover bid.

ArcelorMittal spokesman Luc Scheer said the company had no comment on the report on a Financial Times Web site, which said the company may make a $40 a share bid for AK Steel, valuing the company at $4.5 billion.

Shares of AK steel were trading at $36.92 Tuesday after closing at $32.06 on Monday. The stock has been as low as $11.11 in the past year.

“We don’t have any comment,” AK spokesman Alan McCoy said. Jim Tyler, spokesman for the Machinists union members at the company’s largest mill in Middletown, near Cincinnati, said the union had no comment.

AK Steel Chief Executive James Wainscott has repeatedly said during conference calls with analysts about earnings reports that AK wants to stay independent.

Union workers at AK Steel’s Middletown Works recently agreed on a new contract after a nearly 13-month lockout. Some analysts had speculated that AK would become a takeover target once it shed some of its legacy costs and had a long-term labor agreement in place.

Such an acquisition would follow other recent consolidation in the steel industry, which includes Mittal Steel’s much larger hostile bid for Arcelor and then Tata Steel Ltd.’s purchase of Corus.

Arcelor SA, based in Luxemburg, and Mittal Steel Co. NV, based in Rotterdam, Netherlands, said last week they had moved on the first legal step of forming their combined company to be known as ArcelorMittal.

After the estimated $41 billion deal, the company will control around 10 percent of global steel production.

Mittal Steel already has a strong presence in the Ohio area. It bought Cleveland-based International Steel Group in 2005 in a deal that included plants in Ohio and Weirton Steel in Weirton, W.Va.

AK Steel makes flat-rolled carbon steel and stainless and electrical steel used in cars and appliances. Besides Middletown, AK Steel has smaller plants in Zanesville, Mansfield and Coshocton, Ohio; Ashland, Ky.; Rockport, Ind.; and Butler, Pa.

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