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Severstal to present improved offer at Arcelor meet

They don't want to let us into the world market, says Duma Speaker Boris Gryzlov

Luxembourg : Russian steel giant Severstal, which had made a bid for Arcelor, on Monday offered to make a higher price for the company.

Arcelor, world's number two steel maker, on Sunday accepted the merger offer of world's number one Mittal Steel, and on Monday, chairmen of both companies announced here details of the merger at a press conference.

Arcelor had entered into a strategic tie-up with Severstal on May 26 and the latter was cut up that its representatives were not invited to attend Arcelor's Sunday board meeting.

Severstal, headed by Alexei Mordashov, said that it had an agreement to merge that ties up to the board of Arcelor and was surprised that no discussion was held with them over the revised offer (from Mittal) and no opportunity given to respond.

An AFP report quoted the Russian-firm as saying that in the light of legal agreement it has with Arcelor, it was studying ``all its options''

Severstal, in a statement, said it would present an improved offer at the June 30 Arcelor shareholders meeting, which is due to consider Mittal's merger offer.

According to a Russian daily Izvestia, Mr. Mordashov has forged an alliance with Roman Abramovich, owner of the U.K.-based football club Chelsea to offer a higher price for Arcelor shares.

ABN AMRO Bank has also reportedly offered the required money to the Rusian steel-maker.

Vedomosti, a business daily, has pointed out that Mr. Mordashov's alliance with Mr. Abramovich would be his last chance to woo the Arcelor's shareholders.

``If a new offer for Arcelor was made for 100 per cent of its capital, the board must discuss it,'' Arcelor chairman Joseph Kinsch said at the news conference

News agencies quoted Russian Industry and Energy Minister Viktor Khristenko as saying, ``the moment the Russian economy strengthened and became open we began encountering (such) reactions.''

``I am totally dissatisfied with this decision and regard it as a rather bad sign,'' he said.

Boris Gryzlov, State Duma Speaker and an ally of President Vladimir Putin, told journalists that ``it shows how they simply don't want to let us into the world market.''

``The supreme efforts to block the transaction only underscore the fact that our business is quite competitive,'' he said and expressed confidence that ``the events taking place cannot cast doubt on the potential of Russian business.''

Mr. Khristenko described the situation around Arcelor as proof of ``double standards,'' while Mr. Gryzlov said anti-Russian ``propaganda'' was used to knock down Severstal's bid. — Agencies

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