Severstal gives up on Arcelor bid

Mordashov had admitted that he lacked resources to improve offer for Arcelor.

Russian steel tycoon Alexei Mordashov said that he would abandon his merger with Arcelor in the face of a sweetened takeover bid for the company by Mittal Steel Co, the Vedomosti newspaper said on Thursday.

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Citing two unidentified sources close to the Russian steel maker, the paper said that Mordashov had admitted that he lacked the resources to improve his offer for Arcelor and win the battle with Mittal, whose improved offer, worth Euro 25.4 billion, was approved by the Arcelor board on Sunday after five months of resistance.

On Wednesday, French lawmakers had suggested that Mordashov was intent on coming up with a revised Arcelor deal before a key shareholder meeting on Friday.

"He reckoned that he needs to overcome some financial difficulties to do that," Patrick Ollier, head of the French National Assembly economic committee, said after hearing Mordashov's testimony.

On Monday, a person close to the deal said that Dutch bank ABN Amro had approved a multi-billion Euro facility for Mordashov, suggesting that he was preparing a war chest to counter Mittal's offer.