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Arcelor chief rules out white knight

Dolle says he has great respect for Mittal and that his remarks had been taken out of context.

india Updated: Feb 03, 2006 15:08 IST
Reuters
Reuters
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The head of Arcelor has ruled out a white knight for the embattled steel firm and is open to talking to takeover bidder Lakshmi Mittal during steel industry talks in Paris, a French newspaper reported on Friday.

The remarks, tempering earlier comments about Mittal's $24 billion bid, came in a newspaper interview as the spotlight fell on the possibility of a deal between the world's second largest steeel firm Arcelor and number three, Nippon Steel.

Chief Executive Guy Dolle said a broad shareholding deal with Nippon Steel would not be credible.

"An industrial white knight doesn't exist and I don't believe in a financial one either," Dolle told Les Echos.

He also ruled out another classic takeover defence tactic by saying Arcelor would not pay out an exceptional dividend to unload cash.

Asked about the possibility of a share swap like Renault's tie-up with Nissan, to resist top global steelmaker Mittal, Dolle said: "You would need a precise industrial objective. And this type of alliance with Nippon Steel is not credible."

"We had talked about the idea of doing this with about 2 per cent of the capital when we made a strategic alliance 5 years ago, but the much migher valuation multiples which you get in Japan compared to Europe would have destroyed value."

He did however signal interest in more limited deals.

"I really believe in a 'small white knight' built around an industrial project. That could involve taking over an activity together or developing a project with another player which would be given a stake. We have a lot of potential partners."

Dolle said earlier this week he would meet Nippon Steel during Paris talks of a steel industry association on Friday.

In the newspaper interview, he did not exclude meeting Mittal at the same event.

"I don't know if he (Mittal) will be there and we are at the IISI to talk about the sector, not the (takeover) operation, but if he wants to talk about it then I am flexible," Dolle said.

However he said Mittal's bid was far below Arcelor's value.

Dolle had complained about "Monopoly money" tactics and vowed to defend his company in a battle which he expected to drag on for four to six months.

But Dolle told Les Echos he had great respect for Mittal and that his remarks had been taken out of context.