The chief executive of steel group Arcelor could seek to shore up defences against a €19.8 billion bid by Mittal Steel at an industry summit in Paris, as he seeks partners to strengthen his hand.
Sources familiar with the situation said Guy Dollé could make progress on his defensive options, at a previously scheduled steel summit in the French capital last night and today, and better gauge the chances of alternative deals.
Chief executives of the world of steel are gathering for the meeting behind closed doors in an upmarket city centre hotel, at which the audacious bid to create the world's biggest steel maker will be a hot topic.
Sources familiar with the situation have said that finding a "white knight" counterbidder or buying another steel company are among options being considered by Arcelor and its defence advisers.
Among possible targets are companies that could offer activities in eastern Europe or Russia, and access to iron-ore, said one banking source.
Corus and other west European steelmakers may present too many antitrust hurdles, they added.
Other sources said Arcelor would for now focus on convincing its shareholders that the 27 per cent premium offered by Mittal is insufficient and that the 25 per cent cash portion is too small.
Mittal is offering four of its own shares and €35.25 cash for every five Arcelor shares. Lakshmi Mittal said yesterday in Madrid he had no intention to raise the cash part.
Other people expected in Paris include the heads of ThyssenKrupp and Corus.
The global steel industry is fragmented and the combination of number one Mittal and number two Arcelor would still only control 10 per cent of the market - though it would be far ahead of number three Nippon Steel.
Sources close to Arcelor said the voting majority of the Mittal family in a combined group meant that there could not be a "merger of equals" as suggested by Laskshmi Mittal.
Moreover, they said Mittal shares were cyclical because current activities of the steel maker are more oriented to commodity products, where demand is booming on the back of Chinese demand. - (Reuters)
