The prospect of Mittal-Mordashov ending up with joint control of Arcelor has emerged, with the former keeping a minority stake.
PARIS: The prospect of steel tycoons Lakshmi Mittal and Alexei Mordashov ending up with joint control of Arcelor emerged on Tuesday, with a key Mittal executive saying the firm could keep a minority stake.
Roeland Baan, the chief executive for Europe at Mittal Steel, told the Financial Times Deutschland paper that the world’s biggest steel group by volume had no plans to further raise its offer for Luxembourg-based Arcelor but could end up with a significant stake after its offer expires.
Mordashov, meanwhile, said he could not afford to raise his proposed stake to 45% in Arcelor from a third.
Mittal said on Tuesday it remained focused on obtaining 51% of Arcelor. Banking sources said Mittal was seeking to increase its 8 billion euro loan facility by 2.8 billion euros.
Arcelor on Friday unveiled a 13 billion-euro ($16.59 billion) deal to acquire Russia’s Severstal to make it the world’s biggest and most profitable steel group in a pact seen by many analysts as aimed at blocking the unsolicited bid by Mittal Steel, majority-owned by founder Lakshmi Mittal.
Arcelor will take over Severstal’s assets, including mines and the Lucchini steel firm in Italy, and get a cash payment by Mordashov of 1.25 billion euros. In return it will issue shares at 44 euros each to Mordashev, handing him a 32% stake.
A shareholders meeting scheduled for late June can block the deal if more than 50% of the equity votes against.
One of Mittal’s banks, Goldman Sachs, is actively supporting Arcelor shareholders that oppose the deal and helping to get together at least 20% of the shares to call an extraordinary meeting to change the voting rules.
Mittal’s Baan said the Dutch-registered group might end up with a minority stake that could still be very influential. “It could well be that we in the end perhaps have 40% of the shares in a combined Arcelor and Severstal group,” Baan was quoted as saying by the Financial Times Deutschland.
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