Mittal bid for Arcelor gains US approval

At the same time, Arcelor confirmed it would go ahead with a €5bn return of capital to shareholders, irrespective of whether Mittal raised its offer.

Mittal said it would post its formal offer document next week and hinted that Arcelor's plan to proceed with the share buy-back at the same time could cause regulatory complications. However, Arcelor disputed this, saying its advice was that the buy-back raised no serious regulatory issues.

The two companies both reported lower first-quarter profits yesterday, blaming a fall in steel prices and a rise in raw material costs. But in each case, the figure was above market forecasts.

Mittal said profits fell 35 per cent, with earnings from Asia and Africa hit particularly hard, while Arcelor reported a 20 per cent decline in profits.

Arcelor has refused to sit down and discuss the hostile offer, which is funded mainly in Mittal shares, and yesterday repeated that it would agree to negotiations only if Mittal put an all-cash bid on the table at a higher price.

The offer, which is 75 per cent paper and 25 per cent cash, values Arcelor at €32.2 against a closing price yesterday of €35.1.

Mittal Steel's chief, Lakshmi Mittal, repeated his offer to increase the value of the bid in return for a recommendation from the Arcelor board but appeared to rule our any change in the structure of the deal.