Russia's largest coal and steel producer said in a news release that under the terms of the agreement, a newly formed Evraz subsidiary will make a cash offer for all of Oregon Steel's common stock, and then merge with Oregon Steel.
The board of directors of Oregon Steel has unanimously recommended that the shareholders of Oregon Steel accept the offer.
"The acquisition of Oregon Steel represents a solid platform for Evraz as a footprint in North America, one of the most important markets globally," said Evraz chairman Alexander Frolov.
The offer price of $63.25 per share represents a premium of 22.3% to Oregon Steel's three-month volume weighted average stock price, or a premium of 30.3% to its six-month volume weighted average stock price.
The offer, which is expected to commence during the week of November 27, will be subject to customary conditions, including anti-trust and other regulatory clearances and the acquisition by Evraz of the majority of Oregon Steel's shares. The offer will be followed by a merger at the same price. Upon completion of the transaction, Oregon Steel will become a subsidiary of Evraz.
Jim Declusin, Oregon Steel Mills president and chief executive officer, said: "We believe that this offer represents an attractive opportunity for Oregon Steel's shareholders to realize the value of their investment in the company. We are pleased to join with Evraz and become part of a leading global steelmaker with complementary strengths and markets."
In August, Evraz Group, which produced nearly 14 million metric tons of steel in 2005 and posted revenue of $6.5 billion, sold 41% of its stock to U.K.-based Millhouse Capital, which manages Russian billionaire Roman Abramovich's assets. The company did not disclose the price, but experts valued the deal at $2.7-3 billion.
