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Home > Business > PTI > Report


Severstal keen to outbid Mittal for Arcelor

Vinay Shukla in Moscow | June 26, 2006 15:25 IST

Arcelor's former Russian suitor Severstal has said it would improve its offer to the Luxembourg-based steel giant to thwart a partnership with Mittal Steel, whose bid was accepted by Arcelor Board on Sunday.

In a statement, Severstal said it was amazed that its representatives were not invited to attend Sunday's meeting of Arcelor Board and declared that it is going to improve its bid ahead of the shareholders meeting on June 30.

Severstal, which had earlier announced its merger with Arcelor, felt slighted at not being given a chance to respond.

According to a Russian daily Izvestia, Alexei Mordashov, who controls Severstal, has forged an alliance with Roman Abramovich, the owner of UK-based football club Chelsea to offer a higher price for Arcelor shares.

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

One of the business dailies Vedomosti has pointed out that Mordashov's alliance with Abramovich would be his last chance to woo Arcelor's shareholders.

 Another business daily Kommersant argued that ahead of the G-8 Summit in St. Petersburg next month, Arcelor has seriously complicated EU-Russia relationship. It reminded that President Vladimir Putin has linked the ratification of Energy Charter, much sought by the European Union, to transparant access to Russian companies. Arcelor

SA Board announced last evening the acceptance of Mittal's bid, which was improved by 10 per cent.

"We have an agreement to merge that ties us to the board of directors of Arcelor... We are very surprised that the board did not invite us to discuss our revised offer, and did not give use the opportunity to respond, as we had requested," AFP said quoting statement by Severstal.

On May 26, Severstal and Aercelor announced with great fanfare that the two companies would merge. The Russian firm said on Sunday that, in light of the 'legal agreement' it has with Arcelor, it was studying 'all its options.'

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