Franklin Mutual to tender its 60.1% of Esmark in Severstal offer, opposes deal with Essar Steel

By Lisa Kerner

Charlotte, N.C., June 5 - Franklin Mutual Advisers, LLC said it will tender all of the 23,740,689 shares, or 60.1%, of Esmark Inc. owned by its investment management clients into OAO Severstal's tender offer for the company.

In a schedule 13D filing with the Securities and Exchange Commission, Franklin Mutual cited its May 21 letter to Esmark's board of directors urging the company to merge with Severstal rather than Essar Steel Holdings Ltd.

While Essar and Severstal both offered $17 per share for Esmark, the United Steelworkers supports the Severstal deal, which has already satisfied the conditions required by the company's collective bargaining agreement, the letter said.

Essar's proposal was rejected by the union.

It was previously reported that the offer from Severstal, a Moscow-based metals and mining company, is not contingent on financing, and Severstal expects to consummate the deal within 40 days after entering into a merger agreement.

Esmark is a Wheeling, W.Va., steel producer.

Essar Steel, a flat carbon steel manufacturer based in Essar, India, offered on April 30 to buy Esmark for $670 million.

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