NEW YORK Alton Steel Inc. is weighing interest from prospective buyers, company president Charles Linnemeyer told AMM, having received multiple inquiries from investors looking to acquire the manufacturer.
The company, which purchased bankrupt Laclede Steel Co. and reopened Lacledes mill in Alton, Ill., in 2003, is considering a potential sale after being approached by several interested parties late last year. Linnemeyer said it is outside interest in the company that is spurring any potential sale and not owner John Simmons, who holds 100 percent of Alton Steel.
"We were approached. Its not like Mr. Simmons or the board said, Lets sell the place," Linnemeyer said. "The market actually approached the ownership of this company late last year, and (interest has) grown from there."
Terry Wooden, president of United Steelworkers union Local 3643, told AMM he understood that Alton Steel had reached out to a firm to value the company after receiving interest from prospective buyers.
"I do know that there have been people who have shown interest in the company over the years," Wooden said. "From my understanding, the company approached a firm in New York to put a value on the company, and there have been five bids in the last couple of months as a result of that."
Neither Linnemeyer nor Wooden would disclose specific parties interested in purchasing Alton Steel, but Wooden said the company had received interest from five prospective buyers, including two steel companiesone foreign and one domesticand three investment groups. Wooden said the first group to visit Alton Steel was expected to tour the mill July 25.
Alton Steel recently ratified a two-year contract extension with USW Local 3643 (amm.com, May 10). While Linnemeyer and Wooden agreed that both sides maintain a good working relationship, Wooden said that the union was "apprehensive" about a sale and what it would mean for the labor agreement.
"All we can do is wait and see what happens," Wooden said. "The employees are always apprehensive when something like this transpires. Weve had a good working relationship (with Alton), so when you get into another entity owning the steel mill, its an unknown."
Alton Steel produces about 300,000 tons of special bar quality and merchant quality steel bar products annually.
Linnemeyer said that Alton Steels successful venture into the automotive industry had spurred buyer interest in the company. "A lot of (interest) is due to what we sell," he said. "The market knows we do a fair amount of business, indirectly, with the automotive industry, (and) companies have seen the growth thats going on in the auto industry."