Arcelor poised to snub Mittal again
Monday 12 June 2006
The board of the steel group Arcelor is today expected to announce the rejection of an improved offer from Mittal Steel.
Arcelor held a board meeting yesterday to formally discuss Mittal's €26bn (£17.8bn) bid, made last month. The bid was an improvement on the initial approach made in January.
Arcelor directors also considered their response to a revolt among the company's own shareholders over its alternative €13bn "white knight" deal to buy Russian group Severstal instead.
"I arrive with a very positive state of mind," board member Fernand Wagner told reporters on his way into the meeting at Arcelor's Luxembourg HQ.
Separately, it emerged yesterday that Alexei Mordashov, the Russian tycoon who owns Severstal, has personally written to Arcelor shareholders urging that they accept a tie-up between the two companies.
A meeting will be held on 28 June for Arcelor investors to vote on the Severstal transaction.
However, a group of rebels are furious that, under the rules adopted, the deal can only be stopped if more than 50 per cent of the entire issued share capital of the Luxembourg group votes against it.
The dissident shareholders, who account for 30 per cent of Arcelor, want to hold an extraordinary general meeting to change the voting process on the Severstal deal.
So far, the Arcelor board's tactic has been to concede the fact that the rebels are entitled to call an EGM, while insisting that the event take place after the vote on the transaction - rendering the EGM irrelevant.
The concerned shareholders have threatened legal action against individual Arcelor directors over the issue.
They have also said that, if the 28 June meeting goes ahead, they will vote at the event for a postponement.
The scheduled meeting on the Severstal deal also comes before the 5 July closing date for the Mittal offer - another cause of frustration for the rebels, and also the Mittal camp.
It is unclear whether Mittal will keep a minority stake in Arcelor if it fails to get more than 50 per cent. In a further twist of voting tactics, Mittal could deploy its minority stake at a future Arcelor EGM in conjunction with the company's rebel shareholders.
Rotterdam-based Mittal, majority owned by the billionaire Lakshmi Mittal, and Arcelor are the two largest steel companies in the world. A merger would create a powerhouse capable of producing more than 100 million tonnes of steel a year. It would have revenues of almost £40bn and a workforce of 320,000, but Arcelor has consistently resisted advances from Mittal and has said a deal with Severstal represents better value for shareholders.
A tie-up with Severstal would give the combined company sales of £31bn and production of 70 million tonnes of steel a year.
- 1 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 2 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 4 John Travolta addresses former pilot's gay romance allegations publicly for the first time
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Scottish independence: Police will be on high alert on Friday whatever the result
The wedding photo from Ground Zero: A shot in the dark
QS university world rankings: Imperial College London leapfrogs Oxford to join Cambridge as best British university
Scottish independence exclusive: Millions of banknotes sent to Scotland in case Yes vote sparks run on ATMs
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...