Mittal 'can no longer be trusted', Arcelor chief claims

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The war of words over Lakshmi Mittal's bid for Arcelor intensified yesterday after the head of the European steel maker said it could no longer trust the Indian-born billionaire and hinted that almost any takeover financed with Mittal Steel shares would be unacceptable.

Guy Dollé, the chief executive of Arcelor, also said that the Luxembourg-based steel maker was keeping all options open to defend itself against the hostile £13bn bid from Mittal Steel, including a tie-up with another steel maker, possibly from Asia.

Meanwhile, political opposition to Mittal across Europe deepened with Luxembourg's Prime Minister Jean-Claude Juncker publicly rejecting the offer and the French finance minister Thierry Breton telling his parliament that he had never seen such a "badly prepared" takeover attempt.

Speaking in London, Mr Dollé said if Mr Mittal came back with an offer, Arcelor "could not trust" him to sit down and talk about how a merger of the two might work because of the way he had sprung his unsolicited bid without any prior consultation.

Meanwhile, Mr Juncker told Mr Mittal his government would vote its 5.6 per cent stake in Arcelor against the €28.21-a-share offer, which values the company at €18.6bn (£12.7bn). He said Luxembourg would use "all necessary means" to see off the bid. Mr Mittal will see the Belgian Prime Minister Guy Verhofstadt today.

While Mr Mittal continued his charm offensive across Europe's capitals, Mr Dollé was in the City seeking the backing of UK institutional investors to see off the hostile bid. Asked whether there was a price at which he would have to back a bid from Mittal, he appeared to suggest that any offer made up largely of shares would be unacceptable. "If you came up with [an offer of] €80, that is different. But it depends if it is cash or shares," Mr Dollé said.

The Arcelor chief ruled out a defensive tie-up with a fellow European steel maker such as the Anglo-Dutch group Corus because of the regulatory hurdles it would face. But there are suggestions that Arcelor may seek to forge an alliance with Nippon Steel, with which it already has a relationship.

A Mittal spokesman said: "We believe this strategic combination is the best in a consolidating steel industry. This view is supported by initial market reaction."