Arcelor board will meet today
The board of Arcelor will meet today to consider improving its merger plan with Russia's Severstal.
By Agencies |
PARIS: The board of embattled European steelmaker Arcelor will meet on Wednesday to consider improving its merger plan with Russia's Severstal, seen as a hurdle to rival Mittal's hostile bid for Arcelor, a source close to the deliberations said Tuesday.
The meeting in Luxembourg will also consider the outcome of closed-door talks last week on a possible improved offer for Arcelor from Mittal Steel, headquartered in the Netherlands and controlled by Indian-born magnate Lakshmi Mittal.
Mittal Steel, the world's largest steel producer, is pursuing a 25-billion-euro ($31.4-billion) bid for Luxembourg-based group number two Arcelor that while hostile has not prevented discussions between Arcelor and Mittal executives.
The mooted Arcelor tie-up with Severstal has raised concerns among some shareholders about whether Russian businessman Alexei Mordashov would take control of the merged body, and whether the Luxembourg-based firm is getting the best price. Arcelor chief executive Guy Dolle said in New York Tuesday that the controversial merger plan with Severstal would be improved.
The Arcelor board agreed last month to acquire Severstal in a 12-billion-euro ($15.3-billion) deal, in an effort to thwart the Mittal hostile bid in a cash-and-shares deal. "It's clear that this transaction has been and will be improved answering to some of the concerns of shareholders," Dolle said, adding that Mordashov will not be allowed to hold more than 33 percent of shares without making a special offer.
Dolle said the 18-member Arcelor board would decide whether to go ahead with a planned June 30 shareholders meeting aimed at approving the tie-up. The merger can only be rejected if 50 per cent of Arcelor's shareholders turn up and vote against it. An informed source said that Severstal chief Mordavhov would make an announcement of a deal in Russia on Thursday.
Disquieted minor shareholders succeeded in postponing indefinitely an extraordinary Arcelor shareholders' assembly scheduled for Wednesday which was to have voted on a plan would have enabled Severstal to raise its stake in a combined Arcelor-Severstal entity to 37.5 per cent.
Mittal criticized agreements between the Arcelor board and Mordashov "as a poison pill against our bid." Mittal Steel has dismissed claims that an Arcelor-Severstal tie-up would deliver shareholder value and said Arcelor would "sell itself at a discount to an inferior partner" if the merger was pushed through.
The complicated steel triangle could take another angle on Wednesday with the possibility of Arcelor representatives resuming the stalled talks with Mittal.
Informed sources expect an improved offer from Mittal. Separately, Francois Pinault, an influential French businessman known to be close to President Jacques Chirac, said in an interview with French daily Le Figaro Tuesday that he had joined Mittal Steel's board of directors in order to help its bid for Arcelor.
"I did not like the welcome (Indian-born Mittal CEO Lakshmi Mittal) received in France, nor the xenophobic character, not to say racist, of certain comments made about 'the Indian'," Pinault said.
"I have also introduced him to executives of large companies and French bankers, who have shown that they have great esteem for the entrepreneur that he is," he added.
The meeting in Luxembourg will also consider the outcome of closed-door talks last week on a possible improved offer for Arcelor from Mittal Steel, headquartered in the Netherlands and controlled by Indian-born magnate Lakshmi Mittal.
Mittal Steel, the world's largest steel producer, is pursuing a 25-billion-euro ($31.4-billion) bid for Luxembourg-based group number two Arcelor that while hostile has not prevented discussions between Arcelor and Mittal executives.
The mooted Arcelor tie-up with Severstal has raised concerns among some shareholders about whether Russian businessman Alexei Mordashov would take control of the merged body, and whether the Luxembourg-based firm is getting the best price. Arcelor chief executive Guy Dolle said in New York Tuesday that the controversial merger plan with Severstal would be improved.
The Arcelor board agreed last month to acquire Severstal in a 12-billion-euro ($15.3-billion) deal, in an effort to thwart the Mittal hostile bid in a cash-and-shares deal. "It's clear that this transaction has been and will be improved answering to some of the concerns of shareholders," Dolle said, adding that Mordashov will not be allowed to hold more than 33 percent of shares without making a special offer.
Dolle said the 18-member Arcelor board would decide whether to go ahead with a planned June 30 shareholders meeting aimed at approving the tie-up. The merger can only be rejected if 50 per cent of Arcelor's shareholders turn up and vote against it. An informed source said that Severstal chief Mordavhov would make an announcement of a deal in Russia on Thursday.
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Disquieted minor shareholders succeeded in postponing indefinitely an extraordinary Arcelor shareholders' assembly scheduled for Wednesday which was to have voted on a plan would have enabled Severstal to raise its stake in a combined Arcelor-Severstal entity to 37.5 per cent.
Mittal criticized agreements between the Arcelor board and Mordashov "as a poison pill against our bid." Mittal Steel has dismissed claims that an Arcelor-Severstal tie-up would deliver shareholder value and said Arcelor would "sell itself at a discount to an inferior partner" if the merger was pushed through.
The complicated steel triangle could take another angle on Wednesday with the possibility of Arcelor representatives resuming the stalled talks with Mittal.
Informed sources expect an improved offer from Mittal. Separately, Francois Pinault, an influential French businessman known to be close to President Jacques Chirac, said in an interview with French daily Le Figaro Tuesday that he had joined Mittal Steel's board of directors in order to help its bid for Arcelor.
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"I did not like the welcome (Indian-born Mittal CEO Lakshmi Mittal) received in France, nor the xenophobic character, not to say racist, of certain comments made about 'the Indian'," Pinault said.
"I have also introduced him to executives of large companies and French bankers, who have shown that they have great esteem for the entrepreneur that he is," he added.
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