Accord Expected Calling for Icahn to Put Off New Purchases of USX Stock
USX Corp. Chairman David Roderick and the company’s suitor, investor Carl C. Icahn, are expected to reach an accord by next week that would call for a standstill on further stock purchases by Icahn, Wall Street sources said Friday.
However, the agreement would allow Icahn, who is proposing to buy USX for $8 billion, to review the financial records of the nation’s largest steel company. Icahn owns 11.4% of USX stock.
The unidentified sources said USX sought a standstill agreement and other measures from Icahn before company officials would allow him to do “due diligence” on his $31-per-share takeover proposal. Due diligence is the term used to describe a detailed review of financial records not typically made available by the company.
Last month, Icahn proposed a takeover of USX and threatened to make a tender offer unless the company accepted his proposal or restructured itself to provide greater value to shareholders than $31 per share.
Wall Street sources said there would be other aspects to the accord with Icahn, but they would not elaborate.
One said an agreement “would allow everybody to proceed on a friendly basis.”
The sources said they understood that Icahn has no intention of withdrawing his offer.
USX, meanwhile, continues to negotiate with the United Steelworkers of America, which represents 22,000 workers who have been off the job since Aug. 1. Talks have been going on since late last month.
Some USX officials expected a resolution by now since the company needs an agreement in order to restart mills for first-quarter shipments.
USX has said that orders are placed for the first quarter by mid-November and that if a settlement is not reached with the union, it could be April before workers are back on the job.
The union and company said they have no developments to report, but negotiations continued Thursday night.