Cleveland-Cliffs’ top boss says buying back shares make more sense than takeovers — a view that underpins the US steelmaker’s decision to repurchase as much as $1.5-billion in stock.
“Buying our own stock is clearly a better use of capital than any M&A opportunities at current valuations — so that’s our primary focus,” CEO Lourenco Goncalves said Monday in the company’s first-quarter earnings statement.
The CEO’s comment comes about fourth months after Cliffs lost out in a bidding war for United States Steel Corp. to Nippon Steel. Goncalves has been a vocal critic of the $14.1-billion takeover of the iconic American steelmaker by a Japanese company since then, calling it a severe miscalculation.
Shares of Cliffs were down 2.5% at 4:15 p.m. in after-market trading in New York after reporting first-quarter results that missed analysts’ estimates. The Cleveland-based company agreed to renew its buyback program after ending its previous plan to repurchase up to $1-billion in shares.