Mittal Steel launched its hostile takeover offer for rival Arcelor on Thursday, giving Arcelor shareholders the chance to determine its future after a months-long war of words between the steelmakers.
Offer open till June 29, result to be out on July 13.
LONDON: Mittal Steel launched its hostile takeover offer for rival Arcelor on Thursday, giving Arcelor shareholders the chance to determine its future after a months-long war of words between the steelmakers.
Mittal, the world's largest steel group by production, is offering about 18 billion euros ($23.2 billion) of cash and its own shares for Arcelor, the world's biggest by sales revenue, having received regulatory clearance for the bid from watchdogs in Belgium, France and Luxembourg this week.
The offer is open until June 29. Regulators have said the result will be announced on July 13.
The surprise proposal of £12.7 billion made four months ago fuelled vehement opposition in Europe, including allegations of racism against Indian billionaire Lakshmi Mittal. "Now shareholders will have the opportunity to decide for themselves on the value and merits of our proposal," Mittal said.
Mittal has said it might be willing to raise its bid "marginally", although Thursday's news release made no mention of improved terms. The current offer is about 10% below the price of Arcelor's shares in the market.
If successful, Rotterdam-based Mittal will create a global giant worth around $40 billion, employing 320,000 people and producing around 10% of the world's steel.
Arcelor has urged shareholders to preserve the company's independence and has already promised an increased 2005 dividend and a 5 billion euro share buyback at a price above the market level in a bid to convince them to reject the bid.
Arcelor has also ring-fenced Canadian unit Dofasco, which it bought earlier this year, inside a Dutch foundation. The move would prevent any predator from selling it.
Mittal had a deal to sell the unit to Thyssenkrupp, which lost a stock market battle for the unit last year to Arcelor.
Mittal Steel CEO Lakshmi Mittal said he was pleased the offer was now being put to Arcelor's shareholders. "We continue to believe that our offer is a very attractive one, structured to enable Arcelor shareholders to participate in the exciting growth potential of the combined company, whilst also receiving a generous cash element," he said.
Arcelor chief executive Guy Dolle showed his disdain for Mittal's plans in an interview in Luxembourg newspaper Letzebuerger Journal on Thursday. "It is always difficult to compare a solid industrial plan ... and a mirage based on claims," he said.
Under Mittal's offer, Arcelor shareholders receive four Mittal Steel shares and 35.25 euros for every five Arcelor shares. The maximum amount of cash paid would be 25% of the offer value. (With Reuters)
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