Arcelor formally rejects Mittal bid
It said the offer was "inadequate as it continues to undervalue Arcelor".india Updated: Jun 12, 2006 13:47 IST
Steel giant Arcelor on Monday rejected the 25 billion euros unsolicited acquisition bid by Mittal Steel but agreed to meet officials of the world's largest steelmaker to review its proposal to further improve the offer.
The Arcelor Board "unanimously" rejected the offer, saying it is "inadequate as it continues to undervalue Arcelor" and recommended "shareholders support the proposed merger with the Russian steel group Severstal and set the price per share of the self-tender at Euro 44 -- six euros more than offered by Mittal," Arcelor said in an official statement.
Luxumbourg-based steel giant decided not to commence "such self tender offer until after the publication of Mittal Steel's offer results while mandating the Group Management Board to meet with Mittal Steel in order to review its proposal to further improve its offer.
Although there was no formal word from the Mittals, there were indications that NRI steel tycoon LN Mittal might submit a revised offer.
Pitching for the deal with the Russian Steel group, the Arcelor Board, which met in Luxumbourg on Sunday, also asked its shareholders to support the Severstal transactions at the General Body meeting on June 30.
Stating that Severstal transactions were more "attractive alternative from a strategic, financial and social point of view," Arcelor took a dig at Mittal Steel, saying that "the revisions of Mittal Steel's offer announced on May 19, 2006 demonstrate that its initial offer undervalued Arecelor.
"Notwithstanding the increase in the consideration offered by Mittal Steel, the Arcelor Board of Directors believes that this offer is still inadequate as it continues to undervalue Arcelor," the statement added.