The Hindu : Business : Arcelor offers bumper dividends

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Wednesday, Apr 05, 2006

Business

Business

Arcelor offers bumper dividends

Bid to thwart takeover by Mittal Steel

PARIS: European steel group Arcelor on Tuesday announced a sharp increase in its proposed 2005 shareholder dividend in a move that, dealers said, could help shield it against a hostile takeover bid by Mittal Steel.

Luxembourg-based Arcelor raised the proposed 2005 dividend payout to 1.85 euros per share from the 1.20 euros announced in February and promised to return a further five billion euros to shareholders over the coming months in the form of share buybacks or exceptional dividends.

Arcelor said it had also incorporated Dofasco, its recently-acquired Canadian steel producer that Mittal plans to sell if its bid for Arcelor succeeds, into a separate entity. — AFP

Kolkata Special Correspondent writes:

Our resolve remains: Mittal

Shortly after the measures announced by Arcelor, L N Mittal issued a statement, saying that Mittal Steel's offer is not dependent on the sale of Dofasco. "Nothing in this announcement alters our resolve or ability to proceed with the offer,'' the release said Mr. Mittal said in the release "today's announcement by the board of Arcelor goes against the interests of its own shareholders and is an attempt to deprive them of the right to decide on the merits of the Mittal Steel's offer.

In terms of the proposed increased dividend, he said, any dividend distributed by Arcelor in this manner was being regarded by Mittal Steel "as an advance payment on the cash consideration of our offer, which would be adjusted accordingly."

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