|Bid||8.12 x 3100|
|Ask||8.17 x 2200|
|Day's Range||8.06 - 8.39|
|52 Week Range||6.59 - 12.26|
|Beta (3Y Monthly)||2.05|
|PE Ratio (TTM)||2.84|
|Earnings Date||Feb 6, 2020 - Feb 10, 2020|
|Forward Dividend & Yield||0.24 (3.02%)|
|1y Target Est||8.44|
Cleveland-Cliffs has reached an agreement to acquire AK Steel Holding for $1.1 billion. The deal is expected to bring in about $120 million in cost synergies. Yahoo Finance’s Dan Roberts, Scott Gamm and Anjalee Khemlani discuss on YFi AM.
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Cleveland-Cliffs surprised everyone with its plan to buy AK Steel. Whether investors like the transaction comes down to how they feel about Cleveland-Cliffs dynamic CEO Lourenco Goncalves.
News that Cleveland-Cliffs planned to buy AK Steel sent shares tumbling Tuesday, but the iron-ore miner may have hit a “home run” on the deal.
Is Cleveland-Cliffs Inc (NYSE:CLF) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting […]
WeissLaw LLP is investigating possible breaches of fiduciary duty and other violations of law by the Board of Directors (the "Board") of AK Steel Holding Corporation ("AK Steel" or the "Company") (NYSE:AKS) in connection with the proposed merger of the Company with Cleveland-Cliffs Inc. ("Cleveland-Cliffs") (NYSE:CLF). Under the terms of the merger agreement, AK Steel shareholders will receive a fixed exchange ratio of 0.40 CLF shares for each share of AKS common stock owned, for an implied value of $3.36 per share. CLF shareholders will own 68% of the combined company. The deal is scheduled to close in the first half of 2020.
Anticipated cost synergies associated with the AK Steel acquisition could reach $120 million per year. Here's what that may look like for the combined company.
On CNBC's "Fast Money Halftime Report," Jim Lebenthal revealed he is bullish on Cleveland-Cliffs Inc (NYSE: CLF ) because of the CEO, Lourenco Goncalves. Jon Najarian would not buy Slack Technologies ...
AK Steel Holding Corporation (NYSE: AKS ) has entered into a definitive merger agreement with Cleveland-Cliffs Inc (NYSE: CLF ), in which the latter will acquire all the shares of the steelmaker. Cleveland-Cliffs’ ...
The deal will enable Cleveland-Cliffs (CLF) to transform into a vertically-integrated steel company that will likely boost profitability of both companies.
Shares of AK Steel Holding Corp. rallied Tuesday to a nine-month high, after the steel maker agreed to be bought out by iron ore mining company Cleveland-Cliffs Inc. in an all-stock deal valued at $1.1 billion.
For many investors, the main point of stock picking is to generate higher returns than the overall market. But if you...
Consolidation is usually a good thing in commodity-producing industries. But steel stocks are getting hammered after Cleveland-Cliffs announced plans to buy AK Steel.
Moody's Investors Service says AK Steel Holding Corporation's (AKS), parent of AK Steel Corporation (B2 Corporate Family Rating -- Stable outlook) announcement that it has entered into a definitive merger agreement with Cleveland-Cliffs Inc. (Cliffs - B1 Corporate Family Rating -- RUR down) under which Cliffs will acquire AKS in an all-stock transaction valued at around $1.1 billion on a fully dilutive basis is credit positive. The transaction is anticipated to be debt neutral.
Moody's Investors Service ("Moody's") placed all ratings of Cleveland- Cliffs Inc. (Cliffs) on review for downgrade, including the B1 Corporate Family Rating (CFR) and the B1-PD Probability of Default Rating (PDR). The review follows the announcement by Cliffs that it will acquire AK Steel Holding Corporation (AK Steel) in an all-stock transaction valued at approximately $1.1 billion on a fully diluted basis.
Rowley Law PLLC is investigating potential securities law violations by AK Steel Holding Corporation (NYSE: AKS) and its board of directors concerning the proposed acquisition of the company by Cleveland-Cliffs Inc. (NYSE: CLF). Stockholders will receive 0.40 shares of Cleveland-Cliffs common stock for each share of AK Steel stock that they hold. The transaction is valued at approximately $1.1 billion and is expected to close in the first half of 2020.
Iron ore miner Cleveland-Cliffs shocked the steel establishment with a surprise all-stock buyout of AK Steel. The move has AK Steel shares up in premarket trading while Cliffs shares are tumbling.
(Bloomberg Opinion) -- An otherwise fairly unremarkable Tuesday morning thankfully delivered one of the more memorable answers on an M&A call. Lourenco Goncalves, CEO of Cleveland-Cliffs Inc., was asked a sensible question about the risks around transfer pricing in the just-announced acquisition of AK Steel Corp., to which he delivered this bracing dose of honesty:It’s our company after we close, so we can do whatever we want at the end of the day.Except, of course, the “our” there includes the investors who own Cliffs. Some of them didn’t really agree with the spirit of Goncalves’s take. By midmorning in New York, Cliffs shares were down more than 12%, all but wiping out the premium AK Steel’s own shareholders were being offered in the all-stock deal. Indeed, the immediate winners here aren’t the shareholders of either company, but rather AK Steel’s bondholders.That question about transfer pricing was aimed at one of the main stated rationales for the deal: namely, that combining Cliffs’ iron-ore pellets business with AK Steel’s furnaces would boost the latter’s margins per ton. But that’s the age-old fallacy of vertical integration: Favorable pricing from one part of the merged business to another may optically boost profitability for one, but that comes at the expense of the other.To be fair, Goncalves went on to say people shouldn’t expect Cliffs to cross-subsidize in that way. Unfortunately, the market’s reaction suggests investors may be focused more on the “we can do whatever we want” bit.With the long-term benefits of vertical integration questionable, this deal looks more like an alloy of defensiveness and opportunism.AK Steel is under pressure on two fronts. First, almost two-thirds of its sales are tied to the automotive industry. That is a great business for any steelmaker — except when U.S. auto sales look set to plateau or decline and major overseas markets such as China are struggling already. Steel prices have dropped sharply from the tariff-induced highs of 2018.Second, the continued shift in market share toward electric-arc furnaces using recycled steel represents a structural problem for traditional producers such as AK Steel. This is also why Cliffs is investing in facilities producing more hot-briquetted iron, which targets arc furnaces. Wen Li, an analyst at CreditSights, points out that AK Steel’s leverage — net debt of 3.7 times adjusted Ebitda at the end of September —remained elevated even when steel pricing was good, and was likely to rise as automotive contracts get reset at lower prices.In buying AK Steel, therefore, Cliffs provides support — including refinancing of near-term debt maturities — to a major customer that accounted for a quarter of its product revenue in 2018. Hence, even as Cliffs’ stock plunged and AK Steel’s battered stock ticked up a little on Tuesday morning, the target’s bondholders were high-fiving:The opportunist aspect of the deal reflects AK Steel’s pricing. Cliffs has a literal moat in the form of its positioning in the Great Lakes region, shielding it from foreign competition. However, it also limits growth prospects; consensus forecasts imply earnings per share will fall almost 30% in 2020 and by 2022 will be merely flat with 2019’s level. Even if AK Steel’s vertical integration is of dubious benefit, it offers the possibility of cutting costs to boost the bottom line. At $120 million a year, the touted savings target equates to just under 40% of AK Steel’s trailing selling, general and administrative expenses, which seems like a reasonable target. Taxed, it would also boost pro-forma net income by 16%, all else equal. With the exchange ratio having halved since the start of 2018, that may have been too tempting for Cliffs to pass up.As it stands, against the notional $800 million or so of present value associated with such potential savings, almost $300 million has been wiped off the value of Cliffs’ stock. It doesn’t help that two commodity producers announced a surprise deal just as we are undergoing yet another trade tantrum. Neither does the questionable vertical-integration story. This will ultimately all come down to how much cost can really be cut. On that front, at least, investors will hope management does whatever it takes.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Cleveland-Cliffs Inc. shares headed for their steepest decline in three months after agreeing to buy AK Steel Holding Corp. for $1.1 billion in the biggest takeover of a U.S. steelmaker since Trump tariffs were imposed.Cliffs shares tumbled 12%, wiping over $271 million from the market value of the top U.S. iron ore miner. The deal is “expensive” because it values AK Steel at 8.5 times next year’s estimated earnings before interest, taxes, depreciation and amortization, higher than its peers, according to David Gagliano, an analyst at BMO Capital Markets.“Unfortunately Wall Street sells first and thinks later,” said Cliffs Chief Executive Officer Lourenco Goncalves, who will lead the combined group, said on a conference call with analysts. “We are going to create a company that will be the envy of the industry here in the U.S.”While the deal enables Cliffs to expand into steelmaking by buying its second-biggest customer, it will also add to the miner’s debt pile and dilute its margins. The iron ore producer has obtained about $2 billion in financing commitment from Credit Suisse in connection with a new asset-backed loan and the refinancing of AK Steel’s 2023 senior secured notes.AK Steel had a total debt of $2.24 billion as of the third quarter. That puts it at 3.81 times the company’s trailing 12-month Ebitda, higher than Cliffs’ 3.55 times.Cliffs has an Ebitda margin of 15%, compared with AK Steel’s 8.1%, according to the companies’ joint presentation to analysts.“We do not foresee a competing bid nor antitrust issues for the proposed CLF-AKS deal, but CLF may have some work ahead to win over shareholders,” Jefferies LLC analysts including Alan Spence said in a note, referring to the companies by their exchange ticker.The Cleveland-based miner agreed to pay 0.4 of its own shares for each AK Steel share, the company said in a statement Tuesday. That ratio implies a consideration of $3.36 per share of AK Steel common stock and represents a 16% premium based on closing prices Monday, it said. Cliffs shareholders will own about 68% of the combined company.The slump in Cliffs’ shares pushed down the value of the offer for AK Steel to $2.94 per share, lower than the steelmaker’s current stock price of $3.03.The deal comes as prices of benchmark steel have shown signs of a recovery after dropping by about a third in the past year on concern over slowing economies. AK Steel’s market value has fallen by half since President Donald Trump announced the tariffs on steel imports in 2018 to protect the domestic industry.In July, Goncalves said that “absurdly low” steel prices were temporary, and that he expected to see a rebound.Cliffs gets about 23% of its revenue from AK Steel, making it the iron ore miner’s second-largest customer, behind ArcelorMittal SA, according to data compiled by Bloomberg.What Bloomberg Intelligence Says“CEO Lourenco Goncalves’ track record of successfully executing turnarounds at Cliffs and Metals USA bodes well for the combination, though it’s possible the deal was done more to lock up a home for Cliffs’ future pellet offtake, while providing a lifeline to AK Steel.”\-- BI analyst Richard Bourke\-- Click here for the researchCliffs plunged 12% to $7.37 at 10:42 a.m. in New York. A close at that level would mark the steepest decline in three months. AK Steel climbed 4.6% to $3.0218, making the stock the biggest gainer among the 15 members of a S&P gauge of steelmakers.While Tuesday’s rally boosted the steelmaker’s market value to $956 million, it’s still down 46% since the tariffs were announced in early 2018.The transaction is expected to close in the first half of 2020.The cost to protect against default on AK Steel’s five-year senior debt plunged, according to data provider CMA.Moelis & Co. and Credit Suisse Group AG are financial advisers to Cliffs and Jones Day is serving as legal counsel. Goldman Sachs Group Inc. is advising AK Steel and Weil, Gotshal & Manges LLP is legal counsel.\--With assistance from Reg Gale, Liezel Hill, Sebastian Boyd and Brian Eckhouse.To contact the reporters on this story: Joe Deaux in New York at email@example.com;Yvonne Yue Li in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Steven FrankFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Iron ore pellet producer Cleveland-Cliffs is buying flat-rolled carbon, stainless steel and electrical products maker AK Steel for $1.1 billion. But is it a bright and shiny deal for investors?
Despite an early gloomy trading day, a Dayton-area public company is seeing its stock rise. AK Steel Holding Corp. — which has agreed to an acquisition deal — is trading at $3 per share, up 12 cents, or 4 percent in afternoon trading. The West Chester-based manufacturer (NYSE: AKS) entered an agreement with Cleveland-based Cleveland-Cliffs Inc. estimated to be worth about $3 billion.
Cleveland-Cliffs Inc. (NYSE: CLF ) said Tuesday it will acquire all of the issued and outstanding shares of AK Steel Holding Corporation (NYSE: AKS ) common stock valued at $1.1 billion. Under the terms ...
President Donald Trump suggested a trade deal with China may not come until after the 2020 election, and threatened to impose tariffs on France.