Shareholders pressure Arcelor to talk with Mittal again
14 June 2006
The world's second-largest steel maker, which had signed a merger agreement with Russia's Severstal to ward off Mittal Steel's take-over bid, today said that that it has opened fresh talks with Mittal.
On Monday Arcelor had rejected Mittal's latest offer (See: Arcelor rejects revised Mittal bid; to negotiate for higher bid).
An Arcelor spokesman said there was a meeting with Mittal on Tuesday and more meetings are expected, but he declined to divulge details about the talks. Mittal too declined to comment.
Shareholder fears have been rising over the past few days over the ultimate control of Arcelor. They point out the €13-billion ($ 16.41 billion) Severstal deal lacked transparency and was hastily drawn up. They also fear Russian steel tycoon Alexei Mordashov gaining full control of the merged company.
Meanwhile, Mittal Steel, which had revised the offer price to $26.8 billion, has rejected Arcelor's demand for further revision of the offer price, saying it could make improvements only to the corporate governance component of the bid.
Severstal head Mordashov, meanwhile, defended the Aecelor deal saying he would not be wholly in control of the merged entity and that corporate governance would be balanced. He said that he would have the right to nominate only six of the 18 members of the board of directors, with another three being independent.