Market Regulators Ask Severstal To Declare Plans For Arcelor

Stock market regulators in France, Belgium, Luxembourg and Spain asked Russian steel group Severstal on June 29 to clarify its intentions regarding Areclor following speculation that the Russian company was set to make a sweetened merger proposal.

A member of the French parliament, who had received Severstal owner and chairman, Alexei Mordashov at a closed door parliamentary hearing on June 28, had suggested afterwards that Severstal was preparing to make a new offer to Arcelor.

Severstal had agreed to a merger deal with Arcelor in May that would have seen Mordashov take a 32% stake in Arcelor, but Arcelor management on June 25 accepted an alternative offer to merge with rival Mittal Steel.

Arcelor shareholders were set to vote on June 30 on whether to accept the terms of a merger between Arcelor and Severstal, which had been intended as a defensive move by Arcelor to thwart a hostile takeover raid by Mittal.

"We wish to clarify that we continue to examine all our options in relation to Arcelor. No final decisions on the way forward have been made at this stage," Severstal said in a statement, adding that its agreement with Arcelor for a merger remained "binding and unterminated".

Copyright Agence France-Presse, 2006

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