Arcelor, Mittal for more talks

"There was a meeting yesterday (with Mittal), and there will be more," an Arcelor spokesman said.

Arcelor and Mittal, the world's two largest steel companies, have begun talks about a possible takeover, Arcelor said, more than four months after rejecting Mittal's overtures.

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To ward Mittal off, the Luxembourg-based company penned a merger deal with Russian peer Severstal, but in the past week a shareholder rebellion has been brewing over fears of who would ultimately control Arcelor.

"There was a meeting yesterday (with Mittal), and there will be more meetings," an Arcelor spokesman said. He declined to give further details, including which people met, where and how successful the talks were.

Mittal declined to comment.

One Arcelor source said on Tuesday that the meetings might produce an increased offer from Mittal. Mittal rejected this, saying it could make further improvements to the corporate governance component of the bid, but not the price.

It had already raised its bid once. The offer is currently worth 21.3 billion euros ($26.8 billion).

Arcelor has urged shareholders to accept the 13 billion euro Severstal deal, but many have reservations about it. Some say that it was drawn up hastily and was not transparent.

"We created very balanced corporate governance, representing minority shareholders' interests. For example, I took a written obligation to vote in line with the decision of the board of directors," he said.

Under the deal, he would take 38 per cent of shares in the combined company, become a non-executive president of the board and have the ability to appoint six directors to the board.

Arcelor shareholders who are wary of the deal won on Monday a stronger chance of rejecting the deal by convincing management to allow them to have a special vote on it.