Leaders of rival steel companies Mittal Steel and Arcelor met late on Tuesday and were to have another meeting on Wednesday.
PARIS: Leaders of rival steel companies Mittal Steel and Arcelor met late on Tuesday and were to have another meeting on Wednesday to discuss the former's hostile bid for the latter, sources close to Arcelor said.
One source said: "Members of Arcelor's management on Tuesday met with leaders of Mittal and another meeting is scheduled for Wednesday."
Arcelor chief Guy Dolle was not present at Tuesday's talks, said the source, declining to reveal where they were held.
Another source close to the European steelmaker said "contacts are under way between the two groups."
Arcelor earlier Tuesday vaunted its controversial plans to merge with the Russian group Severstal, a day after formally rejecting Mittal Steel's bid while signalling that it might welcome an improved offer.
Mittal Steel, meanwhile, dismissed claims that an Arcelor-Severstal tie-up would deliver shareholder value and said Arcelor would "sell itself at a discount to an inferior partner" if the merger was pushed through.
It refused again to improve its offer. Arcelor calculated that the proposed merger with Severstal valued the Russian group at between 14 and 17 billion euros" ($17.5-$21.5 billion), according to a document on Arcelor's website.
The merger would enable cost savings of around 590 million euros a year from 2009, said the document which also compared the rival bids from Severstal and Mittal, currently the world's biggest steelmaker.
Estimated core earnings for Arcelor in 2008 amount to 7.0 billion euros, while the same figure for an Arcelor-Severstal entity jumps to 10.3 billion, Arcelor said.
Mittal Steel's European chief Roeland Bann told reporters in a conference call that "Arcelor shareholders have a simple choice.
"To swap their shares for a Russian company with a 10 million tonne output or accept Mittal's offer which is at a significant premium and will give shareholders a share in a real global leader," he said.
In 2005, Mittal and its US subsidiary ISG produced a total of 65.3 million tonnes of steel, while Arcelor and its Canadian subsidiary Dofasco churned out 52 million tonnes.
On Monday, Arcelor rejected the improved, formal Mittal offer as "inadequate." But while dismissing Mittal's 25-billion-euro (32.4 billion dollars) bid, it left the door open to an even better offer, which Mittal was quick to insist would not be made.
Arcelor's planned merger with Severstal will go to a vote in Luxembourg, the company's headquarters, on June 30 and can only be rejected if 50 percent of Arcelor's shareholders turn up and vote against it.
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