Arcelor proposes share buyback to fend-off Mittal Steel''s take-over bid
12 May 2006
Arcelor will ask its shareholders at a meeting scheduled on May 19 to back the repurchase of 150 million of its shares €50 each.
If Arcelor''s share holders approve of the move, it is expected to strengthen the management''s defense against Mittal Steel''s take-over bid announced on January 27, 2006.
L N Mittal, chairman and CEO, Mittal Steel Co, who has maintained that he wants friendly talks with Arcelor, reacted to Arcelor''s proposed buyback saying he remained resolute about completing the takeover.
Mittal''s planned purchase of Arcelor would be the biggest ever in the steel industry and create a producer three times as large as its nearest rival.
Arcelor has transferred Canadian steel maker Dofasco Inc., into a Netherlands-based trust to stop Mittal from selling it to Germany''s ThyssenKrupp AG. Arcelor had won a bidding war with ThyssenKrupp for Dofasco in January 23, this year barely three days before Mittal announced its bid for Arcelor. Mittal had also offerreed to sell the Canadian company to ThyssenKrupp, in the event of the take-over succeeding.
Mittal has said its lawyers were working on a way to unlock Dofasco from Arcelor if the management doesn''t agree to talks.