Brussels/New York: Russian steelmaker Severstal on Tuesday offered improved terms for its proposed merger with Arcelor in the latest attempt to prevent the Luxembourg-based steel company being taken over by world No 1, Mittal Steel.
The revised proposal came on the same day that Arcelor's CEO, Guy Dolle, said he expects unwanted suitor Mittal to improve on its $27.7 billion takeover bid.
But Mittal Steel CEO Lakshmi Mittal said his company has not raised its offer and believes its bid is "very attractive" as it stands.
Arcelor announced last month plans to buy Severstal in a $16.6 billion deal designed to help fight off Mittal's unsolicited offer.
Severstal's majority owner Alexei Mordashov would receive a 32.2-per cent stake in the combined company under the plan.
However, late on Tuesday, Severstal released revised merger proposals, including that Mordashov would settle for 25 per cent of the enlarged company.
It said the new proposal represented a $2.5 billion improvement to Arcelor shareholders, some of whom have been unhappy with the Severstal transaction.
On a day when the CEOs of the world's two largest steelmakers were attending the same conference in New York, Mittal and Dolle went out of their way to avoid each other in a cat-and-mouse game.
"We are not fighting, there is nothing personal between us," Dolle told Reuters, adding that the two men had met several times in the past, including in Paris and Barcelona.
Both he and Mittal - who at one point passed within feet of the room where Dolle was briefing reporters - said they had no plans to meet while they were in New York.
Coincidentally, or not, Mordashov also attended the same conference to receive an award, but there was no word on whether all three men held any discussions.
Improved offer by Mittal
Fund managers meanwhile said Arcelor shareholders expect Mittal Steel to improve its € 22 billion offer, paving the way for a friendly deal between the companies.
Senior-level executives from Mittal Steel and Arcelor have been meeting in the last 10 days in Europe, discussing valuation, corporate governance and other subjects, Arcelor's Dolle told reporters at the steel industry conference.
"This transaction has and will be improved," Dolle said of the Severstal deal, which has been approved by the Arcelor board, but has encountered some opposition from shareholders.
"Both of them could be improved," Dolle said in the briefing.
Later, at a luncheon address, he was asked whether the fact that Arcelor had canceled a shareholder meeting scheduled for Wednesday was an indication that discussions with Mittal were substantive.
At first he declined to make any specific comment, but then said: "We are waiting for a better offer." Lakshmi Mittal, speaking to Reuters at the conference, said talks with Arcelor were due to last a few more days.
Arcelor must choose whether to stick with its plans for a controversial merger with Severstal or reach a deal with Mittal.
Arcelor on Monday canceled its shareholder meeting scheduled for Wednesday to seek shareholder approval for a € 6.5-billion share buy-back plan regarded as a defensive move against Mittal.
Arcelor shares in Paris closed up 2.02 per cent at € 35.40, exactly in line with Mittal's offer.
Mittal Steel shares in Amsterdam ended 1.89 per cent higher at € 25.35, valuing Mittal's offer for Arcelor - one new share plus € 10.05 in cash for every Arcelor share - at € 35.40 a share.
Mittal Steel closed up 4.19 per cent at $32.85 in New York.
Influential US proxy advisory firm Institutional Shareholder Services recommended that shareholders vote against the Severstal transaction.
In a report, ISS expressed concern shareholders had not been given enough time to consider the terms, and that all facts had not been fully disclosed.
Arcelor has said it would cancel the Severstal deal if shareholders representing 50 per cent of the capital voted against it.
A source close to the deal said Arcelor's board would meet on Wednesday but declined to elaborate on its agenda.
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