Some shareholders of Arcelor have accused the company's board of selling out to Russian steel magnate Alexei Mordachov only to keep at bay India-origin industrialist Lakshmi Mittal, who has launched a takeover bid.
BRUSSELS: Some shareholders of Arcelor have accused the company's board of selling out to Russian steel magnate Alexei Mordachov only to keep at bay India-origin industrialist Lakshmi Mittal, who has launched a takeover bid.
"Arcelor's directors will have to explain, above all, why a creeping takeover by Severstal is preferable to the open bid made by Mittal," Colette Neuville, president of the French association for the defence of the rights of minority shareholders of Arecolor.
"This willingness to escape from Mittal at whatever cost is troubling some shareholders," she stated in an interview with Belgium's leading French-language newspaper, Le Soir.
Arcelor must be "coherent," she told the newspaper. She pointed out that "after having denounced all the flaws in Mittal's bid (low-quality output, management in need of improvement, reticence as regards proposed activities), Arcelor must now explain in what way Severstal is more complementary, and just how the management of a Russian conglomerate listed on the Moscow exchange, and run by an oligarchic billionaire, is better."
Neuville told the Belgian newspaper that Mordachov must bid openly for Arcelor (as Mittal has done) "in order to allow shareholders to choose".
She maintained that as he will own 33.3 percent of Arcelor-Severstal he must bid for the company, as required under the company law of Luxembourg, the country in which Arcelor has its headquarters.
Since the bid by Mittal Steel remains open, the Belgian interviewer wanted to know whether "Mittal could in the end find himself a minority shareholder in Arcelor, alongside Mordachov".
Neuville claimed that this would amount to a "fiasco for the Arcelor Board of Directors", as it could result in the company "being controlled by two rival groups." Such a situation, she concluded, "could quite simply result in the company being carved up".
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