The rejection of Mittal's 15 billion pounds offer by Arcelor's Board of Directors could lead the European steel giant into a legal minefield, reports said.
LONDON: The rejection of Mittal Steel's increased 15 billion pounds offer by Arcelor's Board of Directors could lead the European steel giant into a legal minefield, media reports said here.
The possibility that Areclor's Board could obtain approval at the first EGM but have it refused at the second could expose it and its directors to extensive litigation, according to sources quoted in the Times.
On Monday, Arcelor set the tender price of its proposed sharebuyback at 44 euros, the price at which it intends to issue shares to SeverStal's Aleksei Mordashov. However, in the background of protests from shareholders, who complained they were not being fairly consulted over the Russian deal, the company agreed to table a resolution at an Extraordinary General Meeting (EGM) on June 30 to reconsider the SeverStal merger.
This second EGM, if approved, will set the threshold for the approval of the Russian transaction at three quarters of the shares voted, as opposed to the requirement under the Arcelor Board's surprise resolution that over 50 per cent of the company's issued shares must oppose the deal for it to fail.
Arcelor, according to a media report, suggested that the second EGM, a proposal that emerged from a group of protesting shareholders organised by Mittal's adviser Goldman Sachs was a spoiling tactic.
"This complex double shareholders meeting structure with different quorums and majority rules will deprive shareholders of the SeverStal alternative.''
Meanwhile, Union Finance Minister P Chidambaram, who is in Brussels said, "'It is not an India-specific issue."
On being asked about the French governments pungent comments about Mittal's bid, Chidambaram said, ''The French government may have its opinion but it is the shareholders opinions that count.''
He said this issue has only concerned India because Lakshmi Mittal is an Indian- born entrepreneur.
''We are very proud that an Indian is the world's largest steel maker and we wish him good luck in his endeavours,'' he added.
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