Mittal might sweeten Arcelor bid again
Arcelor is expected to officially reject Mittal Steel's hostile takeover offer on Monday, but the world's largest steelmaker has indicated it may be ready to sweeten its bid for the European firm again, sources said on Sunday.
By Agencies |
LUXEMBOURG: Arcelor is expected to officially reject Mittal Steel's hostile takeover offer on Monday, but the world's largest steelmaker has indicated it may be ready to sweeten its bid for the European firm again, sources said on Sunday.
"Mittal, aware of the risks that its offer might be rejected, has recently passed on messages to Arcelor indicating that it may increase its offer again," one source said.
A spokesman for Mittal denied that the company plans to raise its offer. Another source said that Arcelor, which was holding a board meeting on Sunday, will most likely officially reject Mittal's latest offer on Monday.
After a six-hour board meeting at its Luxembourg headquarters on Sunday, board chairman Joseph Kinsch said he "couldn't give details of the decisions taken. We first have to submit them to the market regulator" in Luxembourg. An official statement will be published on Monday, he added.
Arcelor has fought doggedly since late January against an offer by Mittal, the biggest steelmaker worldwide in terms of volume, which became official on May 18 and was raised a day later to 25 billion euros ($32.4 billion).
On May 26, Arcelor announced plans to acquire the Russian steel group Severstal for $15.3 billion (12.1 billion euros) in what analysts said was a bid to become too large for Mittal to swallow. The deal would see Severstal end up controlling 38 per cent of Arcelor, but the deal is opposed by Arcelor shareholders controlling 29 per cent of the group, led by the investment bank Goldman Sachs, which is also advising Mittal on its offer.
Those shareholders have asked that an extraordinary general assembly be called to allow shareholders to vote on the proposed merger, with a two-thirds majority needed to decide one way or another.
At present, a majority of all shareholders is necessary to reject the Severstal deal, which is unlikely to happen because many are not expected to vote. Severstal's chief Alexei Mordashov stressed Sunday the deal is a merger, not an acquisition.
"We're talking about a merger, not a takeover," Mordashov was quoted as saying by the RIA-Novisti news agency. Despite becoming the new group’s largest and "most important" minority shareholder, he said that he was unlikely to take up a key post. "That would be taken badly by everyone involved in the process, employees, shareholders and the government alike," Mordashov explained.
"Mittal, aware of the risks that its offer might be rejected, has recently passed on messages to Arcelor indicating that it may increase its offer again," one source said.
A spokesman for Mittal denied that the company plans to raise its offer. Another source said that Arcelor, which was holding a board meeting on Sunday, will most likely officially reject Mittal's latest offer on Monday.
After a six-hour board meeting at its Luxembourg headquarters on Sunday, board chairman Joseph Kinsch said he "couldn't give details of the decisions taken. We first have to submit them to the market regulator" in Luxembourg. An official statement will be published on Monday, he added.
Arcelor has fought doggedly since late January against an offer by Mittal, the biggest steelmaker worldwide in terms of volume, which became official on May 18 and was raised a day later to 25 billion euros ($32.4 billion).
On May 26, Arcelor announced plans to acquire the Russian steel group Severstal for $15.3 billion (12.1 billion euros) in what analysts said was a bid to become too large for Mittal to swallow. The deal would see Severstal end up controlling 38 per cent of Arcelor, but the deal is opposed by Arcelor shareholders controlling 29 per cent of the group, led by the investment bank Goldman Sachs, which is also advising Mittal on its offer.
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Those shareholders have asked that an extraordinary general assembly be called to allow shareholders to vote on the proposed merger, with a two-thirds majority needed to decide one way or another.
At present, a majority of all shareholders is necessary to reject the Severstal deal, which is unlikely to happen because many are not expected to vote. Severstal's chief Alexei Mordashov stressed Sunday the deal is a merger, not an acquisition.
"We're talking about a merger, not a takeover," Mordashov was quoted as saying by the RIA-Novisti news agency. Despite becoming the new group’s largest and "most important" minority shareholder, he said that he was unlikely to take up a key post. "That would be taken badly by everyone involved in the process, employees, shareholders and the government alike," Mordashov explained.
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