The Hindu : Business : Mittal sweetens bid for Arcelor

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Saturday, May 20, 2006

Business

Business

Mittal sweetens bid for Arcelor

Offers to reduce family stake, intends to relocate global headquarters to Luxembourg

BRUSSELS: Mittal Steel Co. raised its bid for rival Arcelor SA by 34 per cent to euro25.8 billion ($33 billion) on Friday, pledging to make "significant changes'' to its governance and reduce the Mittal family's stake in the company as part of the offer.

Arcelor, which had dismissed the previous offer to combine the world's largest steelmakers as hostile, said its board would meet to evaluate the new terms.

Mittal's original cash and stock bid valued Arcelor at about euro28.21 ($36.02) per share, or euro18.6 billion ($23.75 billion) total. The value has fluctuated with Mittal's stock price, and Mittal is now offering euro37.74 ($48.19) per share. Arcelor shareholders can choose a mix of cash and stock as long as the cash component does not exceed 29.4 per cent.

"We have today announced a materially improved offer, providing an exceptionally attractive premium to Arcelor shareholders,'' said Mittal Chairman and CEO Lakshmi Mittal.

"Not only are we offering a very significant increase in the cash component, but also a greater participation in the combined company.''

Mr. Mittal said at a news conference in London that the company presented its sweetened offer on Friday since it wanted to speed up the deal and could make the revised bid an addendum to the offer formally launched on Thursday.

Merging the world's top steelmakers would create a company with nearly a 10 per cent share of global production and annual revenue of about euro56 billion ($67 billion).

Mr. Mittal said it would adopt a one-share, one-vote structure that replaced a current structure with different classes of stock holding different rights.

If the offer is accepted, Mittal Steel said the family stake in the new combined company ``will be around 45 per cent in share capital and voting rights.'' The family now controls an 87 per cent stake.

Mr. Mittal said it still intended to relocate the company's global headquarters to Luxembourg, the current base of Arcelor. — AP

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