No offer to buy Arcelor: Mordashov
Arcelor CEO, rejected shareholders' criticism that they were not being given a fair say in plans to merge with Severstal.india Updated: Jun 02, 2006 12:02 IST
Severstal CEO Alexei Mordashov said on Friday that he did not want to acquire more than a 32 per cent stake in Arcelor, because Luxembourg law would require him to bid for the company if he bought more.
"It is not my intention to increase my shares in Arcelor ... I can't buy shares. I would be happy to have more shares but I can't," he said, referring to a Luxembourg law stating that he must make a mandatory offer for the company if he owned more than 33 per cent.
If the deal goes ahead, Mordashov cannot buy more shares for four years. However, if Arcelor presses ahead with a planned buyback of up to a quarter of its own shares, his stake could grow to 38 per cent without him paying a cent.
Under Luxembourg rules, he would not be required to bid for the company, because he did not actively increase his stake by buying shares.
Mordashov and Arcelor chief executive Guy Dolle spoke to reporters in Brussels to build support for a controversial merger plan aimed at blocking a hostile bid for Arcelor from Mittal Steel Co.
Arcelor SA said Friday it reached a deal that would give it a controlling stake in Russia's largest steelmaker Severstal and $1.59 billion in cash in exchange for 32 per cent of Arcelor.
"From a financial point of view it is a good transaction for (shareholders)," Dolle said.
Dolle rejected shareholders' criticism that they were not being given a fair say in plans to merge with Russia's Severstal.