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Mittal wants Arcelor to resume talks

Mittal scored another point when EU competition regulators granted a conditional clearance to its bid.

india Updated: Jun 03, 2006 12:25 IST

Mittal Steel, the world's largest steelmaker, pressured its takeover target Arcelor to discuss a friendly deal by giving its business plan to the Luxembourg-based group.

Arcelor had said that Chairman Joseph Kinsch ended secret contacts with steel tycoon Lakshmi Mittal on the grounds that the Indian-born billionaire had refused to disclose his company's business plan to Arcelor.

Mittal's announcement comes as Arcelor faces a possible shareholder revolt after unveiling a 13 billion euro ($16.6 billion) deal with a white knight, Russian steelmaker Severstal.

"They have now the business plan at their disposal," Mittal Steel Chief Executive for Europe Roeland Baan said on Friday.

Arcelor says it needs Mittal's business plan to estimate the value of its would-be suitor's shares.

The world's two biggest steelmakers have been involved in a war of words since late January over Mittal's plans to acquire the European multinational and forge an industry giant with control of 10 per cent of the global steel market.

Mittal also scored another point Friday when it got the blessing of the European competition regulators and was granted a conditional clearance to its proposed bid.

The decision had no impact on investors, because with or without permission Mittal was obliged to pay shareholders who accepted the offer.

To address the European Commission's concerns, Mittal has agreed to sell two Arcelor heavy and medium section steel mills in Germany and Italy and its own section and bar mill in Poland.

Potential revolt

Some Arcelor shareholders have protested that they have little say in the deal with Severstal, which would give the Russian firm's majority owner and chairman Alexei Mordashov 32.2 per cent of the combined company.

Mittal, whose financial adviser Goldman Sachs has helped Arcelor minority shareholders unite their efforts, said on Wednesday rebel investors representing roughly 30 percent of the capital would call a shareholders meeting on the Severstal deal.

Arcelor Chief Executive Guy Dolle said on Thursday the company's board would meet shortly to discuss how to answer its disgruntled shareholders.

Shareholder groups said they were considering legal action to get a standard merger procedure for the Severstal deal or force Mordashov to bid for the whole company.

But the Russian group said the Luxembourg financial regulator had given it assurances that it would not be forced into a mandatory offer for Arcelor if it stuck to the current deal structure.

The financial watchdog confirmed this in a statement issued after market close Friday.

The governments of Spain, Luxembourg and France had raised concerns over Mittal's bid, but have progressively softened to a neutral stance.

"You will not hear me say that I have a preference for one or another deal," French Finance Minister Thierry Breton told a news conference on Friday.