The chairman of Arcelor, the Luxembourg-based steelmaker fighting a hostile bid from Mittal Steel, yesterday survived an attempt by rebel shareholders to unseat him over the controversial "poison pill" defence being used by the company.
Joseph Kinsch was re-elected by a three-to-one majority at Arcelor's annual shareholder meeting despite criticism of the tactics being used to thwart Mittal's €19.6bn approach.
Some 227 million votes, representing 75.7 per cent of those present but only 35 per cent of Arcelor's total shares, were cast in his favour.
Arcelor is proposing to hive off its recently acquired Canadian steel business, Dofasco, into a Dutch foundation, which means it cannot be disposed of for five years. Mittal had planned to sell the business to Thyssen Krupp of Germany if its bid succeeds.
The plan was opposed at yesterday's meeting by the US-based ISS International Proxy Advisory Services and a French-based investor group ADAM, which represents about 5 per cent of the shares.
They both argue that it amounts to an abuse of shareholder rights.
Concern has also been expressed at the possibility of Arcelor issuing new shares to the Russian billionaire Vladimir Lisin, enabling him to take a stake in the company through his own steel company NLMK.
The 72-year old Arcelor chairman opened the meeting by calling on shareholders to place their trust in the board and denying that the company had any intention of carrying out a capital increase with the sole intention of blocking the Mittal bid.
Rebel shareholders said they had not expected to unseat Mr Kinsch, rather they wanted to fire a warning shot over his head. "I don't think Mr Kinsch will not be re-elected, but it is a platform for expressing our displeasure," said Renaud Bérenguier of the Aurel Level brokerage in Paris as he arrived at the meeting.
Many of the 450 shareholders who turned up for the meeting were former employees of Arcelor who turned up to express their support for the company. Mittal had been due to dispatch its offer document by the end of this week but it will now be delayed until next month.Reuse content