A water tower at United States Steel Corp.'s Edgar Thomson Plant in Braddock, Pa., is seen in 2020. On Sunday, Aug. 13, U.S. Steel said that it rejected a $7.3 billion buyout proposal from rival Cleveland Cliffs and was reviewing “strategic alternatives” after receiving several unsolicited offers. Associated Press File Photo

Gene J. Puskar

Lourenco Goncalves, Cleveland-Cliffs' chairman, president and chief executive officer, makes remarks on the expansion of their partnership with the Cleveland Cavaliers in 2022. On Sunday, Aug. 13, U.S. Steel said that it rejected a $7.3 billion buyout proposal from rival Cleveland Cliffs and was reviewing “strategic alternatives” after receiving several unsolicited offers. Associated Press File Photo

John Kuntz

NEW YORK — United States Steel Corp. said that it rejected a $7.3 billion buyout proposal from rival Cleveland-Cliffs and is reviewing “strategic alternatives” after receiving several unsolicited offers.

Pittsburgh-based U.S. Steel said it rejected the offer because Cleveland-Cliffs was pushing it to accept the terms without being allowed to conduct proper due diligence.

Meanwhile, industrial conglomerate Esmark said Monday it also has made a cash offer to buy U.S. Steel that values the steelmaker at $7.8 billion

“At this juncture, we cannot determine whether your unsolicited proposal properly reflects the full and fair value of the company. For all of the above reasons, the board has no choice but to reject your unreasonable proposal,” U.S. Steel CEO David Burritt said in a letter, released Sunday, to Cleveland-Cliffs CEO Lourenco Goncalves.

Cleveland-Cliffs announced earlier Sunday that it had made an offer valuing U.S. Steel at $7.3 billion, based on $17.50 a share in cash and 1.023 shares of Cliffs stock. Cleveland-Cliffs said the value of the offer was $35 a share, a premium over U.S. Steel’s closing stock price of $22.72 on Friday. The company said it decided to reveal the private offer after U.S. Steel rejected it.

Burritt had revealed in an earlier statement that company received several unsolicited offers and had launched “a comprehensive and thorough review of strategic alternatives.” U.S. Steel, which said it expects to receive more proposals, said there was no guarantee that any deal would emerge from the review process.

Burritt said the offers are “a validation of U.S. Steel’s strategy” of transformation, including expanding its electric arc furnace steelmaking and finishing capabilities.

Cleveland-Cliffs said its proposal, first made on July 28, would create a company that would be among the 10 biggest steelmakers in the world and one of the top four outside of China. Cleveland-Cliffs CEO Goncalves said in a statement that the proposal would create “lower-cost, more innovative and stronger domestic supplier for our customers,” and that he stands ready to engage on it despite U.S. Steel's rejection.

Goncalves said the company's offer has the support of the United Steelworkers union, which has 14,000 members at Cleveland-Cliffs and 11,000 at U.S. Steel. In a letter of support posted to the company's website, the union said the company was “in the best position to ensure that U.S. based manufacturing remains strong in this country” and praised the company for not cutting union jobs when it acquired AK Steel in 2019 and ArcelorMittal in 2020.

Cleveland-Cliffs is the largest producer of flat-rolled steel and iron in North America, including the Butler Works in Butler Township. U.S. Steel has been a symbol of industrialization since it was founded in 1901 by J.P. Morgan, Andrew Carnegie and others, though its stock price has struggled in recent years as steel prices have fluctuated.

In Monday trading on Wall Street, U.S. Steel shares soared 36.8% to close at $31.08. Cleveland-Cliffs shares rose 8.8% to $15.98.

Pittsburgh-based Esmark is run by James Bouchard, a former vice president in U.S. Steel’s European operations. In an interview, Bouchard said he is interested in modernizing U.S. Steel and keeping the company under American ownership.

Besides its steel-producing and distribution business, privately held Esmark has operations in aviation, oil and gas exploration, real estate and other industries.