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Last Updated: Monday, 12 June 2006, 04:41 GMT 05:41 UK
Arcelor to make Mittal decision
Workers in a steel plant
High commodity prices have made steel firms attractive to buyers
The board of steelmaker Arcelor is due to announce a decision on a hostile takeover bid from larger rival Mittal.

Arcelor, which is widely expected to again reject the approach, will release its decision at 0600 BST on Monday.

However, a trickier subject will be how to deal with investors who want to halt Arcelor's plan to buy a Russian firm in order to block the takeover by Mittal.

The unhappy investors hold about 29% of Arcelor stock and want a shareholder meeting so they can vote on the plan.

It is reported that Mittal may sweeten the deal to try and convince Arcelor shareholders to back it.

Tough choices

Arcelor is looking to fend off Mittal, which has tabled a hostile bid of nearly 22bn euros (15bn).

Its main strategy to put off the aggressive suitor has been to unveil plans to buy Russian steel firm Severstal in a deal worth some 13bn euros.

Arcelor would end up with 68% of the new merged steel firm, leaving 32% in the hands of Severstal's owner, billionaire Alexey Mordashov. Mr Mordashov is said to have close ties with the Kremlin.

Mittal first launched its hostile bid for Arcelor in January, and has since then upped its offer.

Many Arcelor shareholders have said they prefer Mittal to Severstal, and the European Commission has approved Mittal's bid.

Should Arcelor buy Severstal the move would create the world's biggest steelmaker with a turnover of 46bn euros.


SEE ALSO:
Mittal starts talks with Arcelor
09 Jun 06 |  Business
Mittal and Arcelor to hold talks
07 Jun 06 |  Business
EU OKs Mittal's bid for Arcelor
02 Jun 06 |  Business
Mittal contemplates smaller stake
30 May 06 |  Business
Arcelor to merge with Severstal
26 May 06 |  Business
Mittal Steel ups bid for Arcelor
19 May 06 |  Business


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