Arcelor rejects Mittal's takeover bid
Arcelor's board unanimously rejected the $23 billion hostile takeover bid by rival Mittal Steel on Sunday, amid concerns about potential job losses and differences of opinion over strategy.
"After a thorough review and analysis of the elements at its disposal, the Board has swiftly concluded that Arcelor and Mittal Steel do not share the same strategic vision, business model and values," Arcelor said in a statement.
The 18-strong board of the world's second-largest steelmaker met at the company's headquarters in Luxembourg on Sunday to decide on their response to the unsolicited bid, made on Friday by the No 1 steelmaker.
They recommended to shareholders not to tender their shares in the proposed offer by the Rotterdam-based steel giant, which is 88 per cent owned by Indian-born Laskhmi Mittal, the world's third richest man.
They also expressed their concern about the "severe consequences" Mittal's proposal could have on the group, its shareholders, employees and customers, Arcelor said.
Arcelor said it would hold a press conference on Monday in Paris where it plans to give further details about how it will fight off Mittal's unwanted advances.
"We are going to stay Arcelor," board member John Castegnaro told reporters after the meeting. "We have a very strong case," he added, declining to comment further on how its defence would be deployed.
A Mittal spokesman said the company would hold a news conference with its chief executive on Monday at 1030 GMT in Paris.
Mittal said on Friday it was offering 28.21 euros a share, a 27 per cent premium to Arcelor's closing price on Thursday.
Arcelor's shares jumped as much as 41 percent to a high of 31.29 euros ($38.11) before closing on Friday at a record 28.5 euros, up more than 28 percent, on speculation Mittal would have to raise its bid.
Mittal rallied 6 per cent to a 10-month high of 27.6 euros on the Amsterdam exchange amid a surge in European shares.
JEWEL IN THE CROWN
Luxembourg's government also spoke out against the deal on Sunday, expressing its concern about how it would affect the state's 5.62 per cent stake in the company, arguably the jewel in the crown of the country's economy.
Arcelor, which was created in 2002 by the merger of Spain's Acerlia, Luxembourg's Arbed and France's Usinor, was the third largest employer in Luxembourg in 2005.
"The ministers expressed their concern over the apparent hostile nature of the Mittal bid and the absence of prior consultation with the Luxembourg government and the management of Arcelor," the government said in a statement.
It added that there were no precise details in Mittal's offer about the future role of the Luxembourg state and "the maintenance of the strong guarantees given by Arcelor in terms of employment and investment in Luxembourg."
France also spoke out on Sunday with French Finance Minister Thierry Breton saying he would ask Mittal for details of the bid at a meeting on Monday.
"I am very surprised by (Mittal's) way of proceeding," he told LCI television in an interview.
Arcelor employed about 94,000 globally, including more than 77,000 in Europe, as of the end of December 2004.
Mittal offered cash and shares to create a company capable of producing 100 million tonnes of steel and reaping annual sales of more than $69 billion.
The group would be three times the size of its nearest rival Nippon Steel.
Analysts see the bid by Mittal as a way of addressing oversupply in the steel industry and it is widely expected to prompt consolidation in the sector.
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