Cleveland Cliffs is partnering with rival Nucor in a potential bid for U.S. Steel, whose takeover by Japan's Nippon Steel was blocked by the White House earlier this month, sources tell CNBC's David Faber.
Cleveland-Cliffs would purchase all of U.S. Steel for all cash and then sell off the Big River Steel subsidiary to Nucor, the sources said. U.S. Steel's headquarters would remain in Pittsburgh under the deal.
The offer would be in the high $30s a share. Nippon had planned to buy U.S. Steel for $55 per share in a deal valued at more than $14 billion.
U.S. Steel shares jumped more than 6% on Monday to close at $36.34.
Cleveland-Cliffs CEO Lourenco Goncalves said at a press conference later Monday that he had an "all-American solution" to buy U.S. Steel without providing details. Nucor declined to comment.
U.S. Steel "remains committed to completing" its merger agreement with Nippon, the company said in a statement Monday.
"Only Nippon Steel's partnership will deliver $55 per share to our shareholders and guarantee the significant capital investments and technology sharing needed to ensure a strong U. S. Steel for generations to come and protect jobs," the company said.
The White House over the weekend extended the deadline for Nippon to permanently end its pursuit of U.S. Steel until June, as the companies pursue a lawsuit in federal court against President Joe Biden's decision to block the deal.
U.S. Steel and Nippon have also filed a separate lawsuit against Cleveland-Cliffs, Goncalves and United Steelworkers President David McCall, alleging they colluded to block the deal. Cleveland-Cliffs shares rose nearly 6% and Nucor shares rose about 4% apiece on Monday.
Goncalves has dismissed the lawsuit as a "shameless effort to scapegoat others for U.S. Steel's and Nippon Steel's self-inflicted disaster."
Biden's decision to block the sale came after a review by the Committee on Foreign Investment in the United States, but the president had made clear for months that he believes U.S. Steel should remain an American-owned company.
Biden cited national security concerns in his Jan. 3 decision, saying a strong domestic steel industry is critical for U.S. supply chains. U.S. Steel and Nippon have contended that the deal is in the best interest of workers and national security by strengthening the steel industry in the face of threats from China.
U.S. Steel CEO David Burritt has called President-elect Donald Trump to reverse Biden's decision to block the sale when he takes office later this month. Trump has also opposed Nippon's acquisition of U.S. Steel.
U.S. Steel closed Friday at $34.24 a share.
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