Arcelor board in crucial meeting on Today

PARIS: Directors of European steel giant Arcelor were to meet today in Luxembourg to decide between two suitors: the partnership offered by Russia's Severstal and the takeover bid from Mittal Steel.

The board meeting, chaired by Joseph Kinsch, was to get under way at 10:00 am (1330 IST).

In one corner is a takeover bid from Mittal Steel, the world's largest steelmaker owned by Indian billionaire Lakshmi Mittal, that is of questionable industrial logic but tempting from a financial perspective, sources following the talks say.

The alternative is a merger proposal with Russia's Severstal, controlled by oligarch Alexei Mordashov, that is popular with management but opposed by many shareholders.

Such was the hostility generated by Mordashov that Arcelor had to agree to renew talks with Mittal, whose first bid was launched on January 27.

Arcelor has spurned Mittal's unwelcome advances for the past five months, and earlier this month formally rejected Netherlands-based Mittal's 25.8 billion euro (USD 32.3 billion dollar) bid.

But Mittal is now said to be tabling a substantially higher offer which may prompt Arcelor finally to succumb to its advances.

The Financial Times said Mittal's offer might be raised by up to two billion euros, from the current offer of 37.74 euros per Arcelor share to at least 40 euros in a mixture of cash and shares.