There's no white knight to rescue us, admits Arcelor

Guy Dollé, the chief executive, said: "An industrial white knight doesn't exist and I don't believe in a financial one either."

A tie-up between Mittal Steel and Arcelor, the world's first- and second-largest steel makers, will great a global giant with market share of about 10 per cent. There had been suggestions a white-knight deal between Arcelor and the No 3 player, Nippon Steel of Japan, was a possibility after Mr Dollé held talks with Nippon in Paris. But he described such an alliance as "not credible".

Mr Dollé's admission that his company stands alone came as he and Lakshmi Mittal, the Indian-born tycoon whose family controls Mittal Steel, attended an International Iron and Steel Institute conference in Paris yesterday. The meeting brought together steel industry players from around the world and although it presented a perfect opportunity for the two company heads to discuss Mittal Steel's proposals, they decided against holding talks.

However, Mr Dollé reiterated the opposition of Arcelor's board to the proposal. He said: "We are completely determined in our opposition to Mittal Steel's offer which does not meet the interest of shareholders, its business partners or the rest of the group's stakeholders."

He seems to be facing an increasingly uphill struggle. The French government appeared to soften its stance over the Indian tycoon's audacious move this week. Originally, the French Finance Minister, Thierry Breton, condemned the bid but on Thursday he said it was up to Arcelor's shareholders to decide the company's future.

Mr Mittal spent much of the week trying to get the support of European politicians for his proposals. As well has holding talks with M. Breton, the steel magnate met Pedro Solbes, Spain's Finance Minister, Luxembourg's Prime Minister Jean-Claude Juncker and Guy Verhofstadt, the Prime Minister of Belgium. Next week he will take his case to Arcelor investors.

Mr Mittal's offer envisages annual cost savings of up to $1bn (£570m) for the combined group. Nevertheless, shareholders in the Luxembourg-based Arcelor are known to be concerned about ending up with an investment in a company dominated by Mr Mittal. Under his proposal, a merged Mittal Steel/Arcelor, the Mittal family will hold 64 per cent of the company's voting rights.

Luxembourg's government owns 6 per cent of Arcelor and the group's remaining shareholders consist of institutional investors.

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