Mittal Steel Co has said that it would appeal a ruling by Brazilian regulators requiring it to make a buyout offer to shareholders of a Brazilian division of Arcelor SA, as part of a merger of the world's two largest steel makers.
While analysts said that the side deal could raise the estimated cost of the $31.9 billion merger by another $5 billion, an Arcelor Brazil executive noted that the Brazilian Security and Exchange Commission didn't say how much compensation Arcelor Brasil's minority shareholders should receive.
Regulators "didn't specify an amount or method of payment for the offer," Leonardo Horta, Arcelor Brasil's director of investor relations, told reporters.
Besides fighting the issue in Brazilian courts, Horta suggested that it may be possible to craft a compromise acceptable to regulators.
Mittal had on Wednesday claimed that there was no change of control in Arcelor, headquartered in Luxembourg, and that it did not have to make an offer for Arcelor Brasil SA.
However, Brazilian regulators who scrutinised the deal had said that Mittal was "legally bound" to buy out minority shareholders of Arcelor Brazil, though not Acesita SA, which is controlled by Arcelor.