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Mixed reaction to Mittal's revised bid

Arcelor's board is expected to reject the offer and reaffirm opposition to a friendly merger, on Sunday.

india Updated: May 20, 2006 16:18 IST

A day after NRI steel tycoon Lakshmi Mittal jacked up his offer for rival Arcelor to euro 25.8 billion ($33 bn), an increase of 34 per cent over the earlier offer, reports on Saturday indicated Arcelor investors were unimpressed by the latest bid.

According to Colette Neuville, head of the French small shareholders' group Adam, which speaks for five per cent of Arcelor investors, the new offer was "a step in the right direction" but "it's not in the interests of investors to decide now."

"The investors I speak for have been totally undecided and I imagine this move will make them think again. Perhaps we have not reached the end of the surprises," Neuville said.

The Luxembourg government, the biggest shareholder with 5.6 per cent, refused to comment, saying it would be guided by industrial interests and employment, not financial interests - a view repeated by the Walloon government in Belgium, which holds 2.4 per cent - and said no decision would be taken until late June. Mittal's revised offer runs out on June 29.

The Arcelor board will discuss the offer on Sunday, but is expected to reject it and reaffirm its opposition to a friendly merger, holding out for a significantly improved cash element before recommending it to shareholders.

According to the 'Guardian', Arcelor executives said they will countenance only an all-cash deal worth up to euro 42 a share as against the revised offer of euro 37.74 per share.

First Published: May 20, 2006 16:18 IST