ArcelorMittal to make open offer for Uttam Galva Steels Ltd | business | Hindustan Times
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ArcelorMittal to make open offer for Uttam Galva Steels Ltd

business Updated: Sep 06, 2009 22:41 IST
HT Correspondent

Having inked the deal to buy 5.6 per cent stake in the Rs 4,500 crore Uttam Galva Steels Ltd (UGSL), ArcelorMittal Netherlands BV, led by NRI billionaire LN Mittal, would be launching a tender for open offer on Monday to acquire further 29.39 per cent stake, taking the total transaction value to Rs 500 crore.

The open offer would take the holding of ArcelorMittal in UGSL to 35 per cent. The price offered in the tender offer is Rs 120 per share. In the event of the open offer getting under-subscribed, the Miglani family is to offer ArcelorMittal Netherlands such number of shares so as to ensure that relative shareholding of both co-partners are equal.

The deal, which RK Miglani family and UGSL signed with ArcelorMittal on Friday, would benefit the company with technology transfer and raw material security. “We will be able to offer value added products in Indian and international markets,” said Ankit Miglani, director-commercial, UGSL. The company is also eyeing new segments post the acquisition.

“Funding is not the criteria in this deal. The money would be going to shareholders. The reason is that we want to grow the value of our company,” said Miglani. The deal would also give UGSL access to hot rolled steel from ArcelorMittal, while it is not binding on either party to supply or purchase. The company expects ArcelorMittal to involve in the company while there would be no change its current plans. As per the deal, UGSL is to have six directors, three each from promoter and the co-promoter and equal number of independent directors.