Mittal Steel's hostile bid for the rival steelmaker Arcelor is costing it $100m (£53m) in advisory fees, it emerged yesterday.
The formal offer document detailing the €22bn (£14.9bn) bid also shows that Mittal will have to spend an additional €3bn buying out minority shareholders in two Brazilian companies controlled by Arcelor. The posting of the document finally sets the clock ticking on Mittal's bid, four months after its offer was first announced.
It came as Lakshmi Mittal, the owner of the steel giant and Britain's richest man, was threatened with legal action in Ukraine where government officials claim Mittal reneged on investment promises.
The lion's share of the $100m in fees is accounted for by Mittal's lead investment bank, Goldman Sachs. But it also has four other banks on board - HSBC, Citigroup, Crédit Suisse and Société Générale as well as lawyers, accountants and public relations advisers.
Following the posting of the offer document, the bid has 30 working days to run - to 29 June.
Arcelor has five days to announce any fresh measures to defend itself while Mittal can raise its bid any time up to seven days before the close.
An offer to improve the terms in return for a board recommendation has been rejected by Arcelor. The Luxembourg-based company has devised a "poison pill" defence to thwart Mittal, which involves ring-fencing its North American steel business to stop Mittal from selling it off. Arcelor has also promised to hand back €5bn to investors.
The threat of legal action in Ukraine concerns Mittal's Kryvorizhstal plant, which the company took over when the country privatised its steel industry. A senior state official has now threatened to force the sale of the £2.7bn plant, claiming that its workers are not even receiving the minimum wage and that Mittal is undermining Ukraine's coke industry by sourcing the product from its own coke plants outside the country.
The steel giant strongly rejects the accusations and says it is determined to resolve the dispute through talks.
But Valentina Semeniuk, the head of Ukraine's state property fund, has accused the company of failing to abide by the investment obligations it signed up to when it bought the plant.
She has given Mittal until 6 June to put the problems right or face court action and has said that the government could force Mittal to sell the plant to another investor.
Though she didn't name them, she cited five "foreign and domestic" investors apparently willing to pay £600m more than Mittal parted with last year.