Severstal to sue Arcelor for breach of contract
Russian steel major Severstal said it would sue Arcelor for breach of contract if its board recommended Mittal to shareholders.
By TNN |
LONDON: Russian steel major Severstal said it would sue Arcelor for breach of contract if its board recommended Mittal to shareholders.
Arcelor last month struck a white-knight deal with Russian steel tycoon Alexey Mordashov to buy his 90% stake in OAO Severstal for stock, making Mordashov Arcelor’s largest shareholder. The deal was deeply unpopular with Arcelor shareholders, who petitioned the company to allow them to vote to approve it in a traditional way. Mordashov has also improved the terms of his bid once, agreeing to accept a 25% stake in Arcelor instead of the initial 32% in exchange for Severstal. Arcelor didn’t recommend the new terms and instead continued talks with Mittal to try to get the best deal possible for Sunday’s board meeting to decide on.
Mittal’s initially hostile bid in January provoked acrimonious, sometimes racially tinged rebuffs, from Arcelor’s management and even parts of the European political establishment. Arcelor’s chief executive Guy Dolle described Mittal as a company of Indians whose steel was eau de cologne to Arcelor’s perfume. Dolle did everything possible in the past five months to fend off Mittal’s bid. “We are a Luxembourg-based company with European cultural values,” he said at a news conference days after Mittal announced his bid on January 27.
Arcelor last month struck a white-knight deal with Russian steel tycoon Alexey Mordashov to buy his 90% stake in OAO Severstal for stock, making Mordashov Arcelor’s largest shareholder. The deal was deeply unpopular with Arcelor shareholders, who petitioned the company to allow them to vote to approve it in a traditional way. Mordashov has also improved the terms of his bid once, agreeing to accept a 25% stake in Arcelor instead of the initial 32% in exchange for Severstal. Arcelor didn’t recommend the new terms and instead continued talks with Mittal to try to get the best deal possible for Sunday’s board meeting to decide on.
Mittal’s initially hostile bid in January provoked acrimonious, sometimes racially tinged rebuffs, from Arcelor’s management and even parts of the European political establishment. Arcelor’s chief executive Guy Dolle described Mittal as a company of Indians whose steel was eau de cologne to Arcelor’s perfume. Dolle did everything possible in the past five months to fend off Mittal’s bid. “We are a Luxembourg-based company with European cultural values,” he said at a news conference days after Mittal announced his bid on January 27.
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