Mittal could weigh vote change after Arcelor: IHT | india | Hindustan Times
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Mittal could weigh vote change after Arcelor: IHT

Mittal could consider giving up voting majority in the world's biggest steel group following the purchase of Arcelor.

india Updated: Apr 20, 2006 19:57 IST
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The Mittal family could consider giving up its voting majority in the world's biggest steel group following the planned purchase of Luxembourg-based rival Arcelor, Mittal Steel's chairman was quoted as saying on Wednesday.

"After this transaction is done, the family will have to look at going to one to one," or one vote for every share, Lakshmi Mittal was quoted as saying by the International Herald Tribune in a phone interview.

As part of the planned acquisition, which Arcelor is resisting, the family is cutting the number of voting rights associated with their shares to 2-1 from 10-1, which will still give them a voting majority in the enlarged group.

Mittal Steel was not immediately available to comment on the report, though Mittal on Monday denied a report that the family was being urged to reduce its voting stake in order to win over support from Arcelor's institutional shareholders.

Under the current share and cash bid proposal, the Mittal family would end up with a voting stake of over 60 per cent while their capital stakes will be just over 50 per cent.

Some financial analysts have said a Mittal move to relinquish the special voting rights -- which would allow the family to effectively decide on share increases, dividend pay out levels or acquisitions -- could be important to obtain the support from institutional investors concerned about corporate governance issues at the companies they invest in.

Industrial plan

But the report in the International Herald Tribune suggests that Mittal will not make a vote change ahead of the conclusion of the Arcelor offer. Regulators still need to approve Mittal's bid documents for the offer to officially start.

Belgium said on Tuesday it will respond to Mittal Steel's 19.5 billion euro takeover bid for Arcelor by early April after it received Mittal's full industrial plan for the merger.

Mittal met Belgium's Prime Minister and other Belgian political leaders including the head of the southern Walloon region which owns 2.3 per cent of Arcelor.

Tuesday's presentation was the first time that Mittal, the world's largest steelmaker, disclosed its plan in detail with any of the European governments involved in the deal.

Lakshmi Mittal has been touring the continent to persuade politicians and the European Commission, the EU executive, not to oppose the bid which has fuelled concerns about job losses.

"They have seen this is a very concrete industrial plan with compelling industrial logic for the merger of Mittal and Arcelor," he told Reuters Television after Tuesday's meeting.

France, Luxembourg and Spain have voiced concerns over the possible takeover.