Mittal's current bid has no chance: Arcelor
However, Guy Dolle went on to add that Arcelor's board would have to consider an all-cash proposal.india Updated: Mar 07, 2006 10:21 IST
The chief executive of Arcelor SA declared that competitor Mittal Steel Co has no chance to succeed in its takeover bid with its current "bad offer".
However, he went on to add that Arcelor's board would have to consider an all-cash proposal.
Guy Dolle's comments came at a conference on Monday where the two global steel rivals laid out their cases on the disputed acquisition bid to an audience of industry officials and analysts.
While saying his well-publicised comment equating Mittal's product with cologne rather than expensive perfume was not meant as an insult, Dolle kept up his company's public offensive against the bid.
He criticised the Dutch steelmaker for not unveiling specific plans for what it intends to do after the acquisition.
The appearances by Dolle and Mittal's top US executive Lou Schorsch illustrated the public duel under way in connection with the $23 billion (€19.14 billion) bid made by top industry producer Mittal for No 2 Arcelor on January 27.
Arcelor pledges to thwart the deal through its shareholders, who will have the final say, while Mittal has mounted a campaign touting its benefits to both the shareholders and the European countries where Arcelor's mills are based.
Dolle said an overwhelming majority of the Arcelor shareholders his company has met, representing about half the Luxembourg-based steelmaker's shares, still oppose the cash-and-stock offer despite Mittal's charm offensive to win support for it.
"The deal, with this offer today, will never succeed," Dolle told reporters before addressing the conference sponsored by the Steel Business Briefing trade publication. "Shareholders are not pleased" with the current terms, he added.
Asked what revised offer might gain favour, he said it depends on Arcelor shareholders with varying expectations.
"Of course, a cash offer would be easier to compare to the value they have in mind," Dolle said. "If it is a cash offer, the board has to evaluate it."
A month ago, Dolle compared his company's steel to perfume and that of Mittal to mere eau de cologne-- widely perceived as a jab.
Asked about the flap over his remarks, he maintained he was misunderstood and meant to explain that Mittal's strength isn't in high-end steel, like Arcelor's is.
"I use this cologne," he said. "I don't believe that cologne is insulting. It's a different product."
Speaking to reporters earlier, Schorsch said Mittal's current offer should be sufficient despite continuing opposition to the deal in Europe.
He said the price already is up by more than 30 per cent from the amount set before the cash-and-stock deal was announced in January because of the rise in the two companies' shares.
"By any historical standards that's a very robust premium," said the CEO of Mittal Steel USA, the Chicago-based Mittal subsidiary.
"Obviously any shareholder would like more. But the logic of why we have to give more, unless there is some other bid that emerges, is not good," he added.
In Europe on Monday, Arcelor's employee shareholders urged others to retain their stake in the steelmaker, saying Mittal is more eager to win over the French government than shareholders.
The Association des Actionnaires Salaries d'Arcelor slammed Mittal's move last week to outline its takeover plan to the French government instead of shareholders, saying this led them to conclude that they were unimportant.
AASA's 20,000 members own about 1.9 per cent of Arcelor. The group said last month it would reconsider Mittal's surprise bid if it was an all-cash offer.
French Finance Minister Thierry Breton last week described Mittal's plan as "a bit thin." He earlier criticised Mittal's bid before saying he wanted to see more details on how it might affect the 30,000 people Arcelor employs in France.
Some 85 per cent of the company's stock is distributed among a wide range of groups-- the largest being a 5.6 per cent stake owned by the Luxembourg government which said it will not sell to Mittal.
Some 200,000 individual shareholders also hold between 12 per cent and 15 per cent of the company.
Arcelor, created in 2002 from a merger of French, Luxembourg, Belgian and Spanish steel interests, employs more than 94,000 workers-- almost 30,000 in France, 12,500 in Belgium and 6,000 in Luxembourg, where it is the country's largest employer.