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Mittal bid: Luxembourg amends laws

The Parliament's finance panel backed a change to laws which would prevent a firm from re-submitting a takeover bid.

india Updated: Apr 20, 2006 19:24 IST
Reuters
Reuters
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A committee in Luxembourg’s parliament approved on Wednesday an amendment to the country’s takeover laws that could hurt Mittal Steel’s 19 billion euro ($22.9 billion) bid to buy steelmaker Arcelor.

The finance committee backed a change to the laws which would prevent a company from re-submitting a takeover bid for a listed company in Luxembourg for a period of 12 months, the head of the committee Laurent Mosar told reporters.

Earlier, a source close to the deal said the amendment could threaten Mittal's bid if, for example, Luxembourg-based Arcelor issued more shares, a move which would require Mittal to re-submit its bid.

Mittal chief executive and founder Lakshmi Mittal has previously said he was concerned that Arcelor and its supporters in Luxembourg might block his unsolicited bid to merge the world’s two biggest steelmakers.

The Luxembourg government, the biggest stakeholder in Arcelor with 5.6 per cent, has stated its opposition to the bid and France and Spain, which are also home to Arcelor plants, are against it too.

The amendments approved by the Luxembourg parliamentary committee must now be sent to the country's highest administrative court and then to the floor of the parliament.

Mosar said he expected the changes would clear the parliament in the first week of April.

He said the law could come into force in May and any takeover bids running at that time would have to comply with it. Another source close to the deal said he expected Luxembourg’s financial regulators to clear the bid in the third week of April.

Shares in Arcelor were down 0.4 per cent at 31.60 euros in afternoon trade, narrowing some of their earlier losses. Mittal shares were down 2.7 per cent at 29.22 euros.

Both shares have risen strongly since Mittal announced the surprise bid in January.

First Published: Mar 23, 2006 00:44 IST