- Companies anticipate an earlier-than-expected consummation
of the Merger on March 13
- The extended Expiration Date coincides with this earlier
closing date
- Companies have already received the necessary consents to
effect the proposed amendments to the subject AK Steel
Indentures
Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs”) and AK Steel
Holding Corporation (NYSE: AKS) (“AK Steel”) today announced that
they have extended the expiration date in connection with the
previously announced exchange offers (each, an “Exchange Offer”
and, collectively, the “Exchange 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, to 6:00 a.m., New York City time, on
March 13, 2020 (as the same may be further extended, the
“Expiration Date”). All other terms of the Exchange Offers and
Consent Solicitations remain as set forth in the Offering
Memorandum and Consent Solicitation Statement (as defined below).
As previously announced, the requisite consents have been received
to adopt certain amendments to each of the indentures (the “AK
Steel Indentures”) governing the notes issued by AK Steel
Corporation subject to the Exchange Offers and Consent
Solicitations (the “AK Steel Notes”) to eliminate certain of the
covenants, restrictive provisions and events of default from such
indentures (the “Amendments”).
As previously announced, Cliffs and AK Steel have entered into
an Agreement and Plan of Merger (the “Merger Agreement”) providing
for, among other things and subject to the satisfaction or waiver
(to the extent lawful) of certain conditions, the merger of a
subsidiary of Cliffs with and into AK Steel, with AK Steel
surviving as a wholly owned subsidiary of Cliffs (the
"Merger").
The Exchange Offers are being made pursuant to the terms and
subject to the conditions set forth in the offering memorandum and
consent solicitation statement dated January 14, 2020 (as amended
to date, the "Offering Memorandum and Consent Solicitation
Statement"), and are conditioned upon the closing of the Merger and
the satisfaction of certain other conditions described in the
Offering Memorandum and Consent Solicitation Statement. Cliffs and
AK Steel Corporation currently expect that the Expiration Date will
be extended to coincide with the date of the consummation of the
Merger. As a result, the Expiration Date may be extended one or
more times. Cliffs currently anticipates providing notice of any
such extension in advance of the Expiration Date. The settlement
date is expected to be on the Expiration Date. Cliffs and AK Steel
Corporation reserve the right to terminate, withdraw, amend or
extend the Exchange Offers and Consent Solicitations as described
in the Offering Memorandum and Consent Solicitation Statement.
Tendered AK Steel Notes may be withdrawn at any time prior to the
Expiration Date.
As of 3:00 p.m., New York City time, on February 11, 2020, the
principal amounts of the AK Steel Notes set forth in the table
below had been validly tendered in the Exchange Offers and not
validly withdrawn.
Title of Series/CUSIP Number
of AK Steel Notes
Aggregate Principal Amount
Outstanding
AK Steel Notes Tendered as of
3:00 p.m., New York City time, on February 11, 2020
Principal Amount
Percentage
6.375% Senior Notes due 2025 /
001546AV2
$270,232,000
$231,825,000
85.79%
7.00% Senior Notes due 2027 /
001546AU4
$391,632,000
$341,015,000
87.08%
AK Steel Corporation and the trustee under the AK Steel
Indentures (the “AK Steel Trustee”) have executed supplemental
indentures to each of the AK Steel Indentures to effect the
Amendments. However, the Amendments will not become operative
unless and until: (i) Cliffs delivers to The Depository Trust
Company for the Eligible Holders (as defined below) of applicable
AK Steel Notes the aggregate amount to be paid to such Eligible
Holders as consent payments, upon the terms of and subject to the
conditions set forth in the Offering Memorandum and Consent
Solicitation Statement in respect of the consents validly delivered
and not revoked thereunder, and Cliffs or AK Steel Corporation
notifies the AK Steel Trustee in writing that such delivery has
been made, which condition cannot be waived by Cliffs or AK Steel
Corporation, (ii) the AK Steel Notes that are validly tendered (and
not validly withdrawn) in the Exchange Offers have been accepted
for exchange by Cliffs in accordance with the terms of the Offering
Memorandum and Consent Solicitation Statement, (iii) the Merger has
been consummated, which condition cannot be waived by Cliffs or AK
Steel Corporation and (iv) the other conditions to the Consent
Solicitations have been satisfied or otherwise lawfully waived, if
applicable, by Cliffs or AK Steel Corporation.
The Offering Memorandum and Consent Solicitation Statement and
other documents relating to the Exchange Offers and Consent
Solicitations have been and will only be distributed to Eligible
Holders of AK Steel Notes who complete and return an eligibility
form confirming that they are either (a) a “Qualified Institutional
Buyer” as that term is defined in Rule 144A under the Securities
Act of 1933, as amended, or (b) a person that is outside the
“United States” and is (i) not a “U.S. person,” as those terms are
defined in Rule 902 under the Securities Act of 1933, as amended,
and (ii) a “non-U.S. qualified offeree” (as defined in the Offering
Memorandum and Consent Solicitation Statement) (such holders, the
“Eligible Holders”). Holders of AK Steel Notes who desire to obtain
and complete an eligibility form should either visit the website
for this purpose at http://www.gbsc-usa.com/eligibility/cliffs or
call Global Bondholder Services Corporation, the Information Agent
and Exchange Agent for the Exchange Offers and Consent
Solicitations at (866) 924-2200 (toll-free) or (212) 430-3774
(collect for banks and brokers).
The new 6.375% Senior Notes
due October 15, 2025 and the new 7.00% Senior Notes due March 15,
2027 to be issued by Cliffs in the Exchange Offers (collectively,
the “Cliffs Notes”) have not been and will not be registered under
the Securities Act of 1933, as amended, or any state securities
laws. Therefore, the Cliffs Notes may not be offered or sold in the
United States absent registration or an applicable exemption from
the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws.
About Cleveland-Cliffs
Founded in 1847, Cliffs is the
largest and oldest independent iron ore mining company in the
United States. 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, 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, 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 certain forward-looking statements
within the meaning of the federal securities laws, including
Section 27A of the Securities Act of 1933, as amended, 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. When used in this communication, words such as
“anticipate,” “assume,” “believe,” “build,” “continue,” “create,”
“design,” “estimate,” “expect,” “focus,” “forecast,” “future,”
“goal,” “guidance,” “imply,” “intend,” “look,” “objective,”
“opportunity,” “outlook,” “plan,” “position,” “potential,”
“predict,” “project,” “prospective,” “pursue,” “seek,” “strategy,”
“target,” “work,” “could,” “may,” “should,” “would,” “will” or the
negative of such terms or other variations thereof and words and
terms of similar substance may identify forward-looking statements,
including statements with respect to the businesses, strategies and
plans of AK Steel and Cliffs, their expectations relating to the
Merger, including the expected benefits of the proposed Merger and
the anticipated completion of the proposed Merger or the timing
thereof, and their respective future financial condition and
performance and expectations, estimates and projections about
Cliffs’ or AK Steel’s respective industries or businesses. Cliffs
and AK Steel caution investors that any forward-looking statements
are subject to risks and uncertainties that may cause actual
results and future trends to differ materially from those matters
expressed in or implied by such forward-looking statements.
Investors are cautioned not to place undue reliance on
forward-looking statements. Among the risks and uncertainties that
could cause actual results to differ from those described in
forward-looking statements are the following: the risk that the
Merger Agreement may be terminated in accordance with its terms and
that the Merger may not be completed; the possibility that Cliffs
shareholders may not approve the Merger Agreement and the
transactions contemplated by the Merger Agreement, including the
issuance of Cliffs common shares in connection with the Merger; the
possibility that AK Steel stockholders may not adopt the Merger
Agreement; the risk that the parties may not be able to satisfy any
or all of the conditions to the completion of the Merger in a
timely manner or at all; the risk that governmental agencies may
require Cliffs to agree to certain restrictions on the combined
company’s business in order to obtain the required regulatory
approvals for the Merger, which may negatively impact the combined
company’s results of operations; the risk that the Merger may be
less accretive than expected, or may be dilutive, to Cliffs’
earnings per share, which may negatively affect the market price of
Cliffs common shares; the possibility that Cliffs and AK Steel will
incur significant transaction and other costs in connection with
the Merger, which may be in excess of those anticipated by Cliffs
or AK Steel; the risk that the financing transactions to be
undertaken in connection with the Merger have a negative impact on
the combined company’s credit profile or financial condition; the
risk that Cliffs may fail to realize the benefits expected from the
Merger; the risk that the combined company may be unable to achieve
anticipated synergies or that it may take longer than expected to
achieve those synergies; the risk that any announcements relating
to, or the completion of, the Merger could have adverse effects on
the market price of Cliffs common shares; the risk related to any
unforeseen liability and future capital expenditure of AK Steel or
Cliffs; the risk that pending litigation relating to the Merger and
any potential future litigation against Cliffs, AK Steel or their
respective directors may delay or prevent the completion of the
Merger; the risks related to Cliffs’ ability to issue new senior
notes or obtain a new revolving credit facility in connection with
the Merger on favorable terms, if at all; the risk that the Merger
and its announcement or completion could have an adverse effect on
the ability of Cliffs and AK Steel to retain customers, retain and
hire key personnel and/or maintain relationships with their
suppliers and business partners; and the risk of any changes in
general economic, market or business conditions, or changes in the
economic or financial condition of Cliffs and AK Steel. Other risks
to Cliffs and AK Steel and factors that may present significant
additional obstacles to the realization of forward-looking
statements or that could have a material adverse effect on Cliffs’
and AK Steel’s respective financial condition, operating results,
credit rating, liquidity and businesses generally are described
under the caption “Risk Factors” in Cliffs’ and AK Steel’s
respective Annual Reports on Form 10-K for the year ended December
31, 2018 and other periodic reports filed with the Securities and
Exchange Commission (the “SEC”) as well as in the Registration
Statement (as defined below).
Unless expressly stated otherwise, forward-looking statements
are based on the expectations and beliefs of the respective
management teams of Cliffs and AK Steel based on information
currently available. Forward-looking statements are subject to
inherent risks and uncertainties and are based on assumptions and
estimates that are inherently affected by the respective operations
and business environments of Cliffs and AK Steel, including
economic, competitive, regulatory and operational risks, many of
which are beyond the control of Cliffs and AK Steel and which are
difficult to predict and may turn out to be wrong. The foregoing
list of factors should not be construed to be exhaustive. There is
no assurance that the actions, events or results of the
forward-looking statements will occur, or, if any of them do, when
they will occur or what effect they will have on the results of
operations, financial condition or cash flows of Cliffs or AK
Steel. In view of these uncertainties, Cliffs and AK Steel caution
that investors should not place undue reliance on any
forward-looking statements. Further, any forward-looking statement
speaks only as of the date on which it is made, and, except as
required by law, Cliffs and AK Steel undertake no obligation to
update or revise any forward-looking statement to reflect events or
circumstances after the date on which it is made or to reflect the
occurrence of anticipated or unanticipated events or
circumstances.
Additional Information and Where to Find
It
In connection with the proposed Merger, Cliffs filed with the
SEC a registration statement on Form S-4 (File No. 333-235855) (as
amended and as it may be supplemented from time to time, the
“Registration Statement”) that was declared effective by the SEC on
February 4, 2020 and that includes a joint proxy statement of
Cliffs and AK Steel and also constitutes a prospectus of Cliffs. On
February 4, 2020, AK Steel filed with the SEC its definitive joint
proxy statement/prospectus in connection with the proposed Merger.
Cliffs and AK Steel may also file other documents with the SEC
regarding the proposed Merger. This communication is not a
substitute for the Registration Statement or any other such
document that Cliffs or AK Steel may file with the SEC. INVESTORS
AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT,
THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED
MATTERS. Cliffs and AK Steel began mailing the definitive joint
proxy statement/prospectus to the shareholders of Cliffs and
stockholders of AK Steel, respectively, on or about February 5,
2020. Investors and securityholders may obtain copies of the
Registration Statement, the definitive joint proxy
statement/prospectus and the other documents filed with the SEC
free of charge at the SEC’s website, www.sec.gov. Documents filed
with the SEC by Cliffs are also available from Cliffs free of
charge at its website, www.clevelandcliffs.com, or by contacting
Cliffs’ Investor Relations at 216.694.6544. Documents filed with
the SEC by AK Steel are also available from AK Steel free of charge
at its website, www.aksteel.com, or by contacting AK Steel’s
Investor Relations at 513.425.5215.
Participants in the Solicitation Regarding
the Proposed Merger
Cliffs and AK Steel and certain of their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed Merger.
Information regarding Cliffs’ directors and officers, including a
description of their direct or indirect interests, by security
holdings or otherwise, is set forth in the proxy statement for
Cliffs’ 2019 annual meeting of shareholders, as filed with the SEC
on Schedule 14A on March 12, 2019. Information concerning AK
Steel’s directors and executive officers, including a description
of their direct or indirect interests, by security holdings or
otherwise, is set forth in the proxy statement for AK Steel’s 2019
annual meeting of stockholders, as filed with the SEC on Schedule
14A on April 10, 2019. Additional information regarding the
interests of these participants are included in the definitive
joint proxy statement/prospectus and the Registration Statement, as
well as other relevant materials filed with the SEC when such
materials become available. Free copies of these documents may be
obtained from the sources indicated above.
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 Exchange Offers and Consent
Solicitations, the Exchange Offers and Consent Solicitations are
being made solely pursuant to the Offering Memorandum and Consent
Solicitation Statement and only to such persons and in such
jurisdictions as is permitted under applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200211006089/en/
Cleveland-Cliffs Investor Relations: Paul Finan Director,
Investor Relations (216) 694-6544
Media: Patricia Persico Director, Corporate Communications (216)
650-0168
AK Steel Investor Relations: Douglas O. Mitterholzer
General Manager, Investor Relations (513) 425-5215
Media: Lisa H. Jester Corporate Manager, Communications and
Public Relations (513) 425-2510
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