Mittal’s improved offer accepted
FIVE MONTHS after he offered the hostile bid to take over European steelmaker Arcelor, Mittal Steel owner Lakshmi N. Mittal's dream may have come true.
Mittal Steel and Arcelor are on the point of striking a deal on an improved Mittal alliance offer, a source close to the matter told news agency AFP on Sunday. Arcelor's board which meet in Luxembourg to debate on whether to back Mittal's bid or a rescue deal with Russia's Severstal, has accepted Mittal's offer, the source said.
Even as the board meeting was on, television channels in India reported a merger "in principle" between the two companies. They said the new company would be called Arcelor-Mittal.
Arcelor would pay 130 million euros to Severstal as a "fine", the channels said.
Quoting unnamed sources, NDTV Profit and CNBC TV-18 said the merger value was 43 euros per share and the papers would be signed shortly. Both channels said Mittal and Arcelor chairman Joseph Kinsch would be co-chairmen of the merged company. NDTV Profit said Mittal's stake would come down to 45 per cent.
But a source told AFP that Mittal was now offering 40.37 euros per Arcelor share, up from a previous offer of 37.74 euros, in its bid to forge a partnership with the number two producer.
Arcelor shares, in which trading has been suspended since Wednesday, were last quoted at 35.02 euros. When contacted, Arcelor and Mittal declined to comment on the reports. Luxembourg's economy minister Jeannot Krecke said the Arcelor board would take a decision by late Sunday.
The offer by Severstal, controlled by Alexei Mordashov, is popular with the Arcelor management but opposed by many shareholders. "But Mordachov is determined to go right to the end," a source said.
Arcelor has spurned Mittal's unwelcome advances for the past five months, and earlier this month formally rejected the Netherlands-based Mittal's 25.8-billion-euro bid. But such was the hostility generated by Severstal's Mordashov that Arcelor had to agree to renew talks with Mittal. Arcelor shareholders feared that Mordashov might one day take control of the entire company.