Bid rumours boost US steel firm

Arcelor Mittal is the world's biggest steel company

Shares in US firm AK Steel have jumped amid reports it could be the target of a multi-billion dollar takeover bid.

Arcelor Mittal, the world's biggest steelmaker, is said to be considering an offer for AK Steel, valuing the US firm at $4.5bn (£2.26bn).

Consolidation has been rife within the steel industry, and AK Steel shares jumped by 10% on news of the possible $40-a-share offer.

Arcelor Mittal was itself forged from a controversial merger in 2006.

AK Steel stock has been rising steadily in the past few months, on the back of a major restructuring drive.

"They're a great takeover-buyout candidate, because they've turned everything around since 2004," said Steve Wray, of US brokers Edward D Jones.

Shares in AK Steel were up 9.23% by the close of trade on the New York Stock Exchange, following news of the possible takeover bid on the Financial Times website.