Mittal Steel Says Talks With Arcelor 'Uncertain'

Mittal Steel acknowledged June 20 that talks with Arcelor on Mittal's proposed acquisition of the European steelmaker remained uncertain despite a move by Arcelor to delay a stock buyback plan that favored a Mittal rival.

On June 19 Mittal's chances appeared to get a boost from an Arcelor decision to postpone indefinitely an extraordinary shareholders' assembly scheduled for June 21 at which the controversial share buyback plan was to have been voted. The plan would have enabled Russian steelmaker Severstal to raise its stake in a combined Arcelor-Severstal entity which is advocated by Arcelor management from 32.2% to 37.5%. The share buyback plan to have been voted on June 21 provoked a strong negative reaction by minority Arcelor shareholders hostile to Severstal and forced the cancellation of the assembly.

In order to counter the cash portion of Mittal's offer however, Arcelor reaffirmed late June 19 its intention to redistribute 6.5 billion euros to shareholders. The group said it still "reserves the right to convene an extraordinary general shareholders' meeting in order to allow its shareholders to decide on such distribution in case the unsolicited offer by Mittal Steel was not successful."

Copyright Agence France-Presse, 2006