European steelmaker Arcelor rejected again on June 12 an improved bid from rival Mittal Steel as "inadequate" in favor of a proposed merger with Russian group Severstal.
But while dismissing Mittal's 2 US$32.4 billion hostile offer, Arcelor also left the door open to a new bid, although Mittal was quick to insist that it would offer no more.
After a six-hour June 11 board meeting at its Luxembourg-headquarters, Arcelor said that its "board notes that the revisions to Mittal Steel's offer announced on May 19, 2006, demonstrate that Mittal Steel's initial offer undervalued Arcelor.
Arcelor has fought doggedly since late January against an offer by Mittal, the biggest steelmaker worldwide in terms of volume, which became official on May 18 and was raised a day later to $32.4 billion.
On May 26, Arcelor announced plans to acquire the Russian steel group Severstal for $15.3 billion in what analysts said was a defensive move to become too large for Mittal to swallow. The deal would result in Severstal controlling 38% of Arcelor, but the deal is opposed by Arcelor shareholders holding 29% of the business.
Those shareholders have asked that an extraordinary general assembly be called to allow shareholders to vote on the proposed merger, with a two-thirds majority needed to decide one way or another.
Copyright Agence France-Presse, 2006