BRUSSELS: Mittal Steel Co. said on Friday it was in "advanced and constructive'' talks with Arcelor that could see the takeover target drop its opposition to Mittal's euro25.8 billion ($33 billion) offer.

Arcelor's board meets on Sunday to weigh up both Mittal's offer — which it has fought off since January — and a plan to merge with Russian partner OAO Severstal that, combined with a share buyback, was viewed as a defence against Mittal.

Amid speculation that Mittal may raise its bid a second time, few shareholders have tendered their stakes to the offer closing July 5. The Spanish market regulator CNMV published a statement from Mittal on Friday, saying the company had bought just 0.2 per cent of Arcelor's capital by June 22.

Mittal needs to win at least 50 per cent of its rival for the bid to succeed.

Arcelor shares have been suspended since Wednesday after French, Belgian, Spanish and Luxembourg market regulators asked for "firm and final'' information for shareholders on both the Mittal and Severstal bids. They said the shares should trade again bwy Monday.

Arcelor has already wrung several concessions from Mittal since the initial announcement in January. Mittal responded to criticism of its governance by saying the family of Chairman and Chief Executive Lakshmi Mittal, which currently holds 87 per cent of Mittal Steel, would accept a minority 45 per cent of both share capital and voting rights in a merged company.

Mittal also appointed French businessman Francois Pinault as an independent director and offered to split nominees to its boards 50-50 with Arcelor.

``We can confirm that we are in advanced and constructive discussions with Arcelor which may or may not lead to a recommended transaction,'' Mittal said in a statement on Friday. ``We remain committed to enhancing value for our shareholders.'' — AP

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