United States Steel (U.S. Steel) has commenced a formal review of the business to assess strategic alternatives.

The move follows rebuffing a takeover cash-and-stock offer by U.S. Steel from rival steelmaker Cleveland-Cliffs, citing the bid as being ‘unreasonable'.

Cliffs’s unsolicited offer, which was made earlier this year, valued U.S. Steel at around $7.3bn, reported Reuters.

The offer included $17.50 in cash and 1.023 shares of Cleveland-Cliffs stock for each share held in U.S. Steel.

In a press statement, U.S. Steel said: “U.S. Steel was unable to properly evaluate the proposal because Cleveland-Cliffs refused to engage in the necessary and customary process to assess valuation and certainty unless U.S. Steel agreed to the economic terms of the proposal in advance.”

U.S. Steel said it has also received several unsolicited proposals that ranged from the acquisition of certain production assets to consideration for the whole business.

In response to U.S. Steel’s decision, Cliffs said in a statement: "Cliffs feels compelled to make its offer publicly known for the direct benefit of all of U.S. Steel’s stockholders and also make it known that Cliffs stands ready to engage on this offer immediately.”

To assess the merits and risks of Cliffs’ proposal, U.S. Steel has selected Barclays Capital and Goldman Sachs Group as financial advisers. Milbank and Wachtell, Lipton, Rosen & Katz are serving as its legal advisers.

Cleveland-Cliffs, however, said it prepared to engage with U.S. Steel in "substantive discussions" to work towards a mutually acceptable definitive agreement.

Cleveland-Cliffs president and CEO Lourenco Goncalves said: “Although we are now public, I do look forward to continuing to engage with U.S. Steel on a potential transaction, as I am convinced that the value potential and competitiveness to come out of a combination of our two iconic American companies is exceptional.”