US steel maker Esmark today said an independent arbitrator has set aside a bid for the company from India's Essar Steel, saying that the target company did not inform the workers' union sufficiently in advance about the deal.
The arbitrator's decision holds significance as United Steelworkers (USW), the umbrella union of the industry workers in the US, has been consistently opposing the Essar Steel offer and has instead backed a rival bid from Russia's Severstal.
Although the arbitrator determined that the target company "did not give the USW sufficient advance written notice of the company's April 30 memorandum of agreement with Essar Steel Holdings, it denied all remedies sought by the USW, other than setting aside this MOA", Esmark said.
Following the arbitrator's decision yesterday and in keeping with its good relations with USW, Esmark said in a regulatory filing that it has agreed to extend the USW right to bid period for another three days to June 26.
"We value our relationship with the workers' union and appreciate the guidance the arbitrator has provided to both parties.
"The board of directors looks forward to continuing this process and making a deliberate and informed decision consistent with our fiduciary duties on all offers," Esmark Chief Executive Officer James Bouchard said.
In view of the arbitrator's decision, USW would now have to come up with a competing offer for Esmark until June 26, failing which Essar could revive its earlier bid, which has already been approved by the Esmark's board.
The USW had filed an extensive grievance alleging multiple violations of the parties' collective bargaining agreement.
The arbitrator determined that a 52-day right-to-bid period provided to the workers' union by the company was sufficient under the company's collective bargaining agreement.
Therefore, the arbitrator declined to extend it.
