Severstal acquires firepower, threatens Mittal in Arcelor endgame

LONDON: Russian steelmaker Severstal was on Saturday jostling to thwart any potential raised Mittal Steel offer for rival steelmaker Arcelor as the battle for Arcelor nears its climax, said a source familiar with the matter.

The Russian company has secured a multi-billion euro loan facility from investment bank ABN AMRO to give itself firepower to counter any increased Mittal bid with a proposal that would include cash for Arcelor investors, the source said on Saturday.   

Arcelor, which has agreed to a deal to buy Severstal to defend itself against an unwanted 23 billion euro takeover offer from Mittal, is still in talks with Mittal about a possible raised offer.

Arcelor’s board is due to meet on Sunday in Luxembourg to decide on a proposal by Severstal versus a bid from larger rival Mittal, which may yet raise its offer before the meeting. Lakshmi Mittal, chairman and chief executive of Mittal, was on Saturday heading to Luxembourg for the final stages of the battle, said another source. The Severstal camp is also present in Luxembourg for the showdown, said the source. 

Mittal declined to comment on the movements of its management. A source close to Arcelor said the Luxembourg-based company would give Severstal the opportunity to respond to any raised Mittal offer.    Severstal owner Alexei Mordashov is keen to expand his steel empire beyond Russia.