Mittal Steel has ruled out raising the price on its $23 billion takeover bid for Arcelor as it prepared to present its case to angry European governments. "We think our offer is fair, especially because Mittal Steel shares are currently undervalued," Roland Baan, chief executive of Mittal Steel Europe, told reporters during a tour Feb. 27 of company sites in the United States.
The Financial Times, quoting stock analysts, said Feb. 27 that Mittal Steel would have to raise its offer of 28.21 euros a share by about 20% if it wants to win over reluctant Arcelor shareholders.
Mittal Steel spokeswoman Nicola Davidson told AFP that the Netherlands-based group intended to present "key features" of the takeover to the governments concerned this week. "We will elaborate on these key features and provide further details of our plan in the course of face-to-face meetings which are in the process of being scheduled within the next weeks," she said.
Arcelor outlined a series of financial targets on Feb. 27 for 2006-2008 that it hopes will persuade shareholders to reject Mittal Steel's unsolicited offer. Arcelor managers were to meet about 200 shareholders on Feb. 28 to explain their objectives for the next two years, including planned cost savings of $2.2 billion. Baan retorted: "Arcelor projects to have a 15% return on capital and Mittal Steel has already 20% today."
Mittal Steel says it is committed to preserving jobs at Arcelor and has complained of a "racist" response in Europe to its takeover bid.
Lakshmi Mittal said Feb. 26 in an article in The Observer: "We have met between 50% and 60% of Arcelor's shareholders. A majority of Arcelor's shareholders say that the management (led by chief executive Guy Dolle) should meet us. I am very confident that we will be able to convince all the stakeholders -- the shareholders, the governments and the employees -- that this is in their best interests," he said. "This is a merger of two European steel companies," he added.
Copyright Agence France-Presse, 2006