South Korea's POSCO, the world's third largest steelmaker, said Feb. 23 its shareholders have approved a proposal to ease rules on new share sales in an attempt to forestall hostile takeover attempts. Following the changes, POSCO will be able to sell new shares to strategic partners and double the ceiling on the sale of bonds convertible into stock to two trillion won (US$2.12 billion), Yonhap news agency reported.
Lee Ku-Taek CEO was quoted as telling the meeting that the company must increase its value to avoid becoming a target. "In order to fend off any hostile takeover attempts, we will continue to raise the market value of POSCO," said Lee.
POSCO's share price has surged recently on speculation that the steelmaker, which is more than 60% owned by foreign investors, may become a target for a takeover attempt by Arcelor Mittal, the world's biggest producer.
A senior Arcelor Mittal executive visited POSCO late last month for talks on cooperation but the Korean firm denied there had been any discussion of a merger or acquisition.
POSCO forged an alliance with Japan's Nippon Steel, the world's second largest steeelmaker, in 2000 to cope with a global realignment in the industry. In October last year they agreed to increase stakes in each other after Mittal Steel acquired rival Arcelor.
Copyright Agence France-Presse, 2007.