(Bloomberg) -- U.S. Steel Corp. plans to sell shares in a public offering that would generate about $439 million, capitalizing on a tripling of its stock price this year.
The Pittsburgh-based steelmaker joins miners including Freeport-McMoRan Inc. and Iamgold Corp. in tapping the equity market after metal producers' shares rallied as commodity prices stabilized from the biggest rout in a generation. U.S. Steel is also benefiting from government efforts to stem a tide of cheap imports at a time its costs are declining after a streamlining push.
“The company intends to use the net proceeds from the offering for financial flexibility, capital expenditures and other general corporate purposes,” the steelmaker said Monday in a statement released after the close of regular trading. Its shares fell to $24.90 at 4:52 p.m. from the $25.83 close.
The sale of 17 million new shares, which compares with its 147 million shares outstanding currently, will be managed by banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Barclays Plc. U.S. Steel will grant underwriters a 30-day option to buy as many as 2.55 million additional shares.
U.S. Steel shares have surged 217 percent this year, the best performance on the Bloomberg World Iron/Steel Index after South Africa's Kumba Iron Ore Ltd. Last year, the stock lost 70 percent. The company's bonds are among the top-performing mining and metal debt this year with an 84 percent return. Last year the notes slumped 42 percent.
“It's very well-timed,” Lee McMillan, an analyst at Clarksons Platou Securities Inc. in New York, said by telephone. “They waited it out.”
Last month, copper producer Freeport announced plans to sell as much as $1.5 billion in new stock, in what would be its third equity issuance in the past year.
On Monday, Toronto-based Iamgold unveiled a bought deal for 38.9 million shares priced to raise about $200 million after bullion prices jumped 26 percent this year.
To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net. To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Steven Frank
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
