Monday, May 22, 2006

Luxembourg’s largest steel company Arcelor is ready to study Mittal Steel‘s improved takeover offer, the former said on Sunday, opening the door to possible talks with Indian steel magnate Laxminivas Mittal. Arcelor Chairman Joseph Kinsch told reporters after a meeting of Arcelor’s board that the company’s directors would be ready to examine the details of Mittal’s latest offer once it has been approved by the CSSF (Luxembourg’s financial regulatory body).

Until Sunday, Arcelor, the world’s second-largest steel company, had firmly rejected world-leader Mittal’s bid to take the former company over and form a global steel giant. The softening of Arcelor’s stance comes after Mittal Steel raised its hostile cash-and-equity bid by a third on Friday and dropped a key demand for family control over the combined entity.

Media reports had suggested that Arcelor was trying to find another company to rescue it from being taken over by Mittal Steel. Possible candidates included Russian tycoon Vladimir Lisin and Russia’s Magnitogorsk Iron & Steel Works (MMK). Mittal’s move on Friday came after the value of its initial offer fell more than 10 percent behind the market worth of Arcelor, as the latter announced a buyback of its own shares at above-market prices to ward off Mittal Steel.

Laxminivas Mittal, who has hinted that the bitter takeover battle might have a hint of racism involved in it, told the French newspaper La Tribune that he was sure that the attractive nature of his revised offer would enable him to obtain over 50% of the Arcelor shares. He added that he was of the opinion that the involvement of a Russian third party would not be in the best interests of Arcelor’s shareholders.