Mittal CFO says to adjust Arcelor bid if buyback
Financial regulators in Belgium, France and Luxembourg have cleared Mittal's way to launch its cash and equity offer.india Updated: May 17, 2006 13:32 IST
Mittal Steel will meet investors to "listen to their demands" after its offer for rival Arcelor is launched on Thursday but could cut the cash component, a company official was quoted as saying on Wednesday.
Mittal's Chief Financial Officer Aditya Mittal told France's Les Echos newspaper in an interview that a reduction in the cash component of the 19 billion euro ($24.33 billion) bid would be the "automatic" consequence if Arcelor went ahead as part of its defences with a contested share buyback.
"This operation creates confusion and raises a number of questions. The financial market authority has expressly forbidden a buyback," Aditya, son of Mittal founder and chief executive Lakshmi Mittal, was quoted as saying.
"If this public buyback goes ahead and finishes before ours, our price will automatically be adjusted down, eventually to the point of reducing the cash component of our offer to zero," he said.
"But the strong appreciation of Mittal makes the share exchange more attractive than cash," he added.
Financial regulators in Belgium, France and Luxembourg on Wednesday cleared the way for Mittal to launch its cash and equity offer. Spanish regulators are expected to follow suit as soon as Wednesday.
"The offer period will last from 18 May 2006 until 29 June 2006 inclusive," a joint statement said.
"The closing of the offer period will occur on the same day in all jurisdictions concerned by the offer, ie Luxembourg, France, Belgium, Spain and the United States."
Mittal Steel, which had said it wanted its cash and equity offer to begin this week, said it was delighted by the approval from most of the regulators.
"We remain excited about the prospects of our offer, which is based on very sound industrial logic and provides tremendous value creation potential," Lakshmi Mittal said in a statement.
Mittal said the offer in the United States would start on the date that a registration statement currently under review by the Securities and Exchange Commission was declared effective.
Arcelor, which is fighting to remain independent and set up defences against its unwanted suitor, declined to comment on Tuesday's development.