ISG's bid seems to be only valid Beth Steel offer

Its deal appears assured of winning court approval

2 rivals didn't meet deadline

Lack of other bids cancels auction set for today

April 16, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Bethlehem Steel Corp. will not hold a scheduled auction today after receiving no additional valid bids, clearing the way for International Steel Group Inc. to gain bankruptcy court approval next week for its $1.5 billion purchase of the steelmaker.

Competing bids must have been filed with the U.S. Bankruptcy Court in Manhattan by 4 p.m. Monday, but none was filed, said Robert S. "Steve" Miller Jr., Bethlehem's chairman and chief executive officer.

The company, he added, expects to proceed to a sale hearing before the court April 22.

"We fully expect the judge will approve the sale," Miller said.

The deal will likely close in the next few weeks, he said.

On March 12, ISG agreed to buy virtually all of Bethlehem's assets - including the Sparrows Point plant in Baltimore County -for nearly $1 billion in cash and $500 million in assumed liabilities.

Without any rival bidders, ISG is poised to acquire Bethlehem in a move that would create the country's largest maker of raw steel, with an annual capacity of 16 million tons.

"Obviously we're pleased with the outcome," said Mitch Hecht, ISG's chief financial officer. "This has been a long process, but we're anxious to move forward with a confirmation by the bankruptcy court April 22, and our closing shortly thereafter."

Two firms had expressed interest in bidding on the Pennsylvania steelmaker. North Point Industries LLC, a Baltimore County firm, sought to delay the bid deadline by one month so that it could prepare a bid to buy the steelmaker.

Another firm called Bramcote, based in Audubon, Pa., also had expressed an interest in bidding, a Bethlehem spokeswoman said yesterday.

Miller said that "neither bid had the required deposit attached to it, therefore, they are not qualified bids."

"The second aspect is credibility of the bids. We had our financial advisers contact both offerers and ... we received no comfort that these propositions were executable," Miller said. "The disruption and the actual cost in delaying this and the risk that we might have a worse outcome than ISG was a very high risk."

F. Ridgely Todd Jr., a North Point official, said his firm would try to work with Bethlehem's creditors committee in an attempt to get invited to next week's sale hearing, where it would put up the $10 million deposit and ask for an extension. Bramcote could not be reached for comment yesterday.

Bidders had to meet specific guidelines ordered by the bankruptcy court, including putting up a $10 million deposit and bidding at least $15 million more than ISG's offer. Bidders also had to be able to provide up to $32 million in breakup fees and other reimbursements to ISG if that company's bid lost.

"Fanciful bids just don't prevail in bankruptcy," said Peter A. Chapman, president of Bankruptcy Creditors' Service Inc. and editor of newsletters that follow billion-dollar companies facing restructuring.

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