STEUBENVILLE - Essar Steel Holdings Ltd. of India has reached an agreement to buy Esmark Inc., parent of Wheeling-Pittsburgh Steel Corp., for $17 a share, according to a statement released shortly after 9 a.m. today.

The deal could be worth as much as $246.5 million.

Esmark's board of directors unanimously accepted the offer, the company said, but the statement describes the action as an agreement "to the material terms of a proposed tender offer and merger", not a definitive agreement.

The United Steelworkers union has a right to seek alternative bids under its contract, but the company said it would enter into the sale upon waiver or expiration of the unionás 52-day bid period.

Esmark said it also has entered into a binding commitment with Essar for a $110 million term loan, anticipated to be funded by the middle of May, with proceeds to refinance an existing term loan and provide additional liquidity.

James P. Bouchard, chairman and chief executive officer of Esmark, said the merger is the result of an extensive review of strategic options including exploratory discussions with a number of partners.

"With spiraling raw material and transportation costs, difficulty securing long-term financing commitments and the investment challenges associated with maximizing steel production capacity, we were convinced that a strategic partner like Essar was the best possible solution for the long-term prospects of the company moving forward," Bouchard said. "I am grateful to the employees of Esmark and Wheeling-Pittsburgh, our shareholders as well as the United Steelworkers for their continued belief in our company, and I am proud that the Esmark family will be joining a great company like Essar."

Madhu S. Vuppuluri, president of Essar Americas, said, "Essar is very excited about the potential merger with a great company located in the steel capital of the United States. We plan to make significant investments into Wheeling-Pittsburgh Steel to make it a low-cost, technologically advanced steel producer. We look forward to a strong relationship with the United Steelworkers, our employees, as well as the local communities."

Essar, within 10 days of entering into a definitive agreement, will have a wholly owned subsidiary make a cash tender offer for all outstanding Esmark common stock at $17 a share. If more than half the outstanding shares are tendered, a second step, cash-out merger would follow, with all remaining Esmark common stock to be converted into the right to receive $17 per share.

Based on 14.5 million outstanding shares as listed in the most recent annual report, the $17 per share price would place the deal at $246.5 million.

Essar Steel Holdings Ltd. describes itself as a "global producer of steel covering India, Canada, USA, the Middle East and Asia." The firm said it is fully integrated, from its own ore holdings to ready-to-market products, supplying automotive, construction, engineering, shipbuilding and white goods industries. It has an annual capacity of 8 million tons and plans to see capacity rise to 20 to 25 million tons by 2012.

Dennis Halpin, Wheeling-Pitt's director of investor relations, said a conference call scheduled by management for 2 p.m. today that was to discuss Esmark's earnings reports for the fourth quarter and year end of 2007 would still be held, though it is anticipated the call will instead discuss the Essar-proposed agreement.

Esmark was facing de-listing by the Nasdaq market because it had failed to meet deadlines by the Securities and Exchange Commission to file its annual report. Esmark had appealed the determination and the de-listing was stayed, pending the marketás decision on the appeal.

Esmark took over Wheeling-Pittás board of directors in November 2006 and completed its takeover of the steelmaker in November 2007, merging its steel service centers with the locally based steelmaker. The company announced it is closing the Allenport, Pa., steel line and two galvanizing lines at Martins Ferry at the end of May.

It has been unable to secure a long-term solution to its financing issues since completing the merger in November, instead obtaining extensions of financing packages.

Contacted this morning, officials at United Steelworkers 1190 at Steubenville, which includes workers at Wheeling-Pitt's production facilities in Steubenville and Mingo Junction, as well as the Mountain State Carbon joint venture coke plant at Follansbee, said they had not been briefed on the proposal.

Severstal North America, an arm of Russian steelmaker OAO Severstal, is the joint venture partner in the coke plant and had been showing interest in a possible Wheeling-Pitt purchase, according to workers, but officially had not confirmed it was looking at the steelmaker.

Severstal wound up being awarded an $810 million cash purchase of the ArcelorMittal Sparrows Point, Md., steel plant, which had been sought by Esmark for a potential combination with Wheeling-Pitt. Esmark's $1.35 billion financed deal collapsed in December.