Takeover target Arcelor said yesterday its board would decide on the latest rival proposals from Mittal Steel and Russia's Severstal on Sunday and then make a recommendation to shareholders.

"The board has decided unanimously to meet again on Sunday, June 25th... in order to take a decision regarding the latest proposals of Mittal Steel and of [ Severstal owner] Mr Mordashov," the company said.

The statement followed a meeting of the directors to discuss which suitor offered the best match after Severstal improved the terms of its agreed merger proposal, aimed at blocking Mittal's €23 billion bid and marking a further twist in what a fund manager described as a five-month "soap opera".

Shares in Arcelor had been suspended pending the group's statement after French regulators had asked the company to clarify the state of its merger talks with both groups, according to a statement released by regulators.

In an unusually robust joint statement, financial authorities in Belgium, Luxembourg, Spain and France scolded Arcelor and said its shares would be suspended until it, Mittal and Severstal clarified their positions.

Meanwhile, analysts and dealers said Mittal Steel, owned by Indian-born billionaire Lakshmi Mittal, might improve its own bid.

"It seems to be a win-win situation for Arcelor because Severstal has improved the offer substantially and now this might force Mittal to sweeten its offer if it really needs Arcelor," said a trader at a French brokerage.

But a Mittal spokesman said no new proposals were made to Arcelor and some analysts suggested Mittal might have the upper hand already.

"At this stage, they [ the shareholders] seem to be favouring his transaction rather than Severstal," said one analyst.

Asked whether he was confident of an improved Mittal bid by Sunday, Arcelor chairman Joseph Kinsch said "we'll see that on Sunday" after leaving the meeting, which he called "constructive".

- (Reuters)