Arcelor investors, led by Zaleski, to shun Severstal | india | Hindustan Times
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Arcelor investors, led by Zaleski, to shun Severstal

india Updated: Jun 30, 2006 15:14 IST

Arcelor shareholders led by billionaire Romain Zaleski are likely to reject a merger with Russia's OAO Severstal on Friday, paving the way for Mittal Steel to buy Arcelor and create the world's largest steelmaker.

Mittal is "a better option for Arcelor shareholders," Zaleski, the biggest owner with a 7.8 per cent stake, said in an interview in Milan. "I will obviously vote against the Severstal accord."

Billionaire Lakshmi Mittal offered $32.2 billion for Arcelor, the biggest-ever steel-industry takeover. Arcelor accepted an improved offer from Mittal on June 25 after five months of resistance that included a deal with Severstal.

At least 50 per cent of Arcelor investors must vote against the Severstal plan at a meeting tonight in Luxembourg to block it.

Severstal hasn't said if it plans to make a counter-bid for Luxembourg-based Arcelor. If below 50 per cent shareholders reject the Russian company, Arcelor may be forced to merge and give a 32 per cent stake to Severstal owner Alexei Mordashov under a previous agreement. Mittal then would need to gain majority control of the enlarged company to complete a takeover.

Zaleski has been rallying Arcelor investors to block Severstal. A French minority shareholders group known as Adam, which represents about 5 per cent of Arcelor's outstanding stock, will vote to reject it, Chairwoman Colette Neuville had said on Thursday in Paris.