LUXEMBOURG: Arcelor is expected to officially reject Mittal Steel's hostile takeover offer on Monday, but the Indian steelmaker owned by Lakshmi Mittal has indicated it may be ready to sweeten its bid for the European firm again, sources said.
"Mittal, aware of the risks that its offer might be rejected, has recently passed on messages to Arcelor indicating that it may increase its offer again," one source said.
Another source said that Arcelor, which was holding a board meeting on Sunday, will most likely officially reject Mittal's latest offer.
"It is practically certain that the board will not make its position known publicly before tomorrow," the source said.
Arcelor has fought doggedly since late January against an offer by Mittal, the biggest steelmaker worldwide in terms of volume, which became official on May 18 and was raised a day later to 25 billion euros ($32.4 billion).
On May 26, Arcelor announced plans to acquire the Russian steel group Severstal in what analysts said was a bid to become too large for Mittal to swallow.
In Moscow, Severstal's chief Alexei Mordashov
stressed the steel producer’s deal with the European steel group Arcelor is a merger, not an acquisition.
"For the first time in Russia's modern history our company becomes part of a global company, of the largest player in its field," Mordashov said, according to the RIA-Novosti news agency.
"We're talking about a merger, not a takeover," Mordashov said, pointing out that the merger would make Severstal the new group's largest and "most important" minority shareholder, but said that he was unlikely to take up a key post.
"That would be taken badly by everyone involved in the process -- employees, shareholders and the government alike," Mordashov explained.
Under the terms of their merger, Arcelor is to buy Severstal in a $15.3 billion transaction but Mordashov would end up with a stake of 38 percent in the merged company.
