Arcelor yesterday unveiled a higher-than-expected jump in its dividend payout, a move seen by many as a defence against Mittal Steel's hostile €18.6bn ($22 billion) bid.

Luxembourg-based Arcelor, the second-biggest steelmaker, said it would pay out €1.2 per share in dividends, an 85 per cent increase on 2004's payment.

But Guy Dollé, Arcelor chief executive, denied the higher dividend was a response to the bid from Mittal.

"Considering our fantastic results and our stock price performance, it is a normal payout," he said.

Arcelor generated net profits of €3.8 billion last year, up from €2.3 billion in 2004, in spite of a drop in steel prices. Gonzalo Urquijo, chief financial officer, said the higher payout "reflects structural improvements of Arcelor's profitability", and that the group was "committed to keep increasing shareholder remuneration year on year".

Mr Dollé said he would only consider an offer from Mittal if it was improved, and all in cash. "If it was a full cash offer we would have to have a look." He said this was "the sole way of evaluating" a bid, given the fluctuation in Mittal´s share performance. But Lakshmi Mittal, chairman and chief executive of Mittal Steel, said on Wednesday he would not raise his bid.

Mr Dollé scotched rumours that Arcelor was trying to strike a deal with another steelmaker.

"There will be no white knight, no full merger with anyone. But we are still investigating partnerships with others." He said Arcelor was especially keen to expand in Brazil, Russia, India and China. "We are not interested in partnerships in western Europe," he said, as this was the group's traditional area of strength.