Mittal worried about Arcelor's plan to spoil bid
Eight weeks after Mittal announced his bid, the takeover battle still remains at an early phase.india Updated: Apr 20, 2006 19:40 IST
The chief executive of the world's biggest steel maker Mittal Steel Lakshmi Mittal said he was really worried by a plan by Arcelor management to spoil his 19 billion euro takeover bid.
"The management of Arcelor has an idea to make this transaction fail," Mittal told the Saturday edition of Belgian business daily L'Echo in an interview.
"I am really worried about the obstacles that Arcelor's management and the Luxembourg Chamber of Commerce are confronting us with," he was quoted as saying.
Luxembourg is currently drafting a bill that will transpose European Union takeover laws into national legislation.
The Chamber of Commerce, which is led by an Arcelor executive, said earlier this week it wanted to add an amendment to the law that could force Mittal Steel to pay for Arcelor in cash only, rather than cash and shares.
Under the proposal from the Chamber of Commerce, only a company which has at least a quarter of its shares publicly traded could make a bid offering to pay with shares.
Because 88 percent of Mittal Steel is owned by the Mittal family, Mittal would have to pay for Arcelor in cash only if the proposal became law.
But Laurent Mosar, the head of Luxembourg's parliamentary finance committee, said on Friday that lawmakers would not back that proposal.
"There will be an amendment on liquidity but it will not be the one of the Chamber of Commerce," Mosar said.
The Luxembourg government, which owns 5.6 per cent of Arcelor, has been the most vocal critic of Mittal's bid.
Mittal reiterated that he was confident that his offer would begin in the first half of April and that the takeover process would be over before four to five months.
Sources close to the regulatory process said earlier this week that such a time frame was feasible but optimistic.
Eight weeks after Mittal announced his bid, the takeover battle remains at an early phase as bourse regulators still need to approve bid documents before investors can start to determine the outcome.