Investing.com — United States Steel Corporation (NYSE:X) and Japan’s Nippon Steel Corp have filed a lawsuit challenging President Joe Biden’s decision to block their proposed acquisition, claiming the move violates constitutional guarantees of due process.
“With the bid blocked and X again trading on fundamentals, we now see X as reasonably valued,” BofA analyst said.
Bank of America resumed coverage of the stock with a “neutral” rating and a $35 price target, assuming U.S. Steel secures a $565 million breakup fee from the failed transaction.
Analysts also note potential upside if U.S. Steel becomes a target for domestic acquirers, given the interest shown in the company during 2023.
Additionally, hot-rolled coil prices are projected to rise in early 2025, driven by seasonal demand, renewed non-residential construction, and higher scrap costs. U.S. Steel is poised to benefit as it ramps up production at its Big River Steel 2 mill, further increasing volumes and pricing prospects.
The companies in the lawsuit argue that the review process by the Committee on Foreign Investment in the United States or CFIUS and Biden’s subsequent order were influenced by unlawful political factors.
The case, filed in the U.S. Court of Appeals for the District of Columbia Circuit, seeks to overturn the order and set aside the CFIUS review. A second lawsuit targets Cleveland-Cliffs (NYSE:CLF) Inc, its CEO and United Steelworkers union president, alleging coordinated efforts to sabotage the deal.
