Reuters
THURSDAY, MARCH 30, 2006
A Mittal spokesman said that the terms of the offer, equivalent to $25.2 billion, included an automatic adjustment if Arcelor pays a dividend of more than 80 cents, "which was the market consensus. "If Arcelor decides to distribute extra cash to shareholders, we will consider that as an advance payment on our offer and adjust the cash component of our offer accordingly," the spokesman said. In February, Arcelor announced a plan to increase its dividend by 85 percent to €1.20 per share - which was seen as a move to court investors. Arcelor has consistently rebuffed Mittal Steel's bid, and the company highlighted the strength of its safety record Wednesday, which has formed part of its defense. It organized a health and safety day at more than 700 company sites in 60 countries, holding forums to discuss safety issues. Arcelor said it had one of the best track records for health and safety issues in the steel industry, with the number of accidents at work sites steadily falling since the company was created in 2002. "We have in four years reduced the number of incidents by a quarter, and one of the reasons is the exchange of experiences within the group," said Guy Dollé, Arcelor chief executive. Asked about market speculation that Arcelor might make an acquisition in Brazil, Dollé replied that Brazil was one of four key markets for the group. "We are already sufficiently big in Brazil, we are looking everywhere, everywhere in the world," he said. Along with Brazil, Dollé added that the company would continue a strategy of expanding in the former Soviet Union, Ukraine, India and China. Luxembourg to avoid deal The trade minister of Luxembourg pledged Wednesday that his government would not interfere with Mittal's bid for Arcelor, insisting that the company's shareholders should have the final say, The Associated Press reported from New Delhi. Jeannot Krecké, Luxembourg's Minister of Economy and Foreign Trade, was in India to boost trade ties, but his talks with Indian officials also focused on the tussle between Mittal and Arcelor. Krecké told reporters that he sought "to clarify the Luxembourg government's position" on the issue, which many in India believe is discriminatory. The Luxembourg government, which holds a 5.6 percent stake in Arcelor, has vocally opposed Mittal's bid. But Krecké said his government was not trying to influence the possible deal and that the matter should be decided by the majority of Arcelor's shareholders. "Clearly, this is a matter for shareholders," Krecké said. "Our investment bankers are looking into the offer." LONDON Mittal Steel said Wednesday that it would cut the cash part of its €21 billion offer for rival Arcelor to account for Arcelor's higher-than-expected dividend.A Mittal spokesman said that the terms of the offer, equivalent to $25.2 billion, included an automatic adjustment if Arcelor pays a dividend of more than 80 cents, "which was the market consensus."If Arcelor decides to distribute extra cash to shareholders, we will consider that as an advance payment on our offer and adjust the cash component of our offer accordingly," the spokesman said.In February, Arcelor announced a plan to increase its dividend by 85 percent to €1.20 per share - which was seen as a move to court investors.Arcelor has consistently rebuffed Mittal Steel's bid, and the company highlighted the strength of its safety record Wednesday, which has formed part of its defense.It organized a health and safety day at more than 700 company sites in 60 countries, holding forums to discuss safety issues.Arcelor said it had one of the best track records for health and safety issues in the steel industry, with the number of accidents at work sites steadily falling since the company was created in 2002."We have in four years reduced the number of incidents by a quarter, and one of the reasons is the exchange of experiences within the group," said Guy Dollé, Arcelor chief executive.Asked about market speculation that Arcelor might make an acquisition in Brazil, Dollé replied that Brazil was one of four key markets for the group."We are already sufficiently big in Brazil, we are looking everywhere, everywhere in the world," he said.Along with Brazil, Dollé added that the company would continue a strategy of expanding in the former Soviet Union, Ukraine, India and China.Luxembourg to avoid dealThe trade minister of Luxembourg pledged Wednesday that his government would not interfere with Mittal's bid for Arcelor, insisting that the company's shareholders should have the final say, The Associated Press reported from New Delhi.Jeannot Krecké, Luxembourg's Minister of Economy and Foreign Trade, was in India to boost trade ties, but his talks with Indian officials also focused on the tussle between Mittal and Arcelor.Krecké told reporters that he sought "to clarify the Luxembourg government's position" on the issue, which many in India believe is discriminatory.The Luxembourg government, which holds a 5.6 percent stake in Arcelor, has vocally opposed Mittal's bid.But Krecké said his government was not trying to influence the possible deal and that the matter should be decided by the majority of Arcelor's shareholders."Clearly, this is a matter for shareholders," Krecké said. "Our investment bankers are looking into the offer."
Several weeks ago Netherlands based company Mittal Steel made a takeover bid for Arcelor, prompting legislation from Luxembourg (5.6% owners of Arcelor, the largest stockholders) and cries of discrimination from India.

Mittal is owned by the world's fifth wealthiest man, Laskshmi Mittal, an Indian. After the takeover bid, the Luxembourg Chamber of Commerce attempted to introduce new rules that would stop companies with less than 25% of their shares in free float from making a cash and bid offer for a company whose location is in Luxembourg. India news reports then claimed that this was a discriminatory action because Laskshmi Mittal is an Indian.

Luxembourg officials have disputed this, stating that their actions were only due to the need to comply with EU legislation. The country's minister for economy and foreign trade, Leannot Krecke, stated, "The government will have no role in impeding the bid. We intend to bring the takeover bill in May to put in the best international practices in our economy." Krecke also stated that a similar bill will have to be brought to the national governments of each of the 25 EU member nations so that they complied with EU legislation. 

Word of New Delhi's displeasure with Luxembourg's stance seems to have been translated to Luxembourg during a meeting that the finance ministers of both countries had in India. 

Meanwhile, Mittal has announced that it is prepared to cut the cash portion of its buyout offer. Mittal will do so if Arcelor increases its dividend to shareholders above the 80 cent market consensus. A spokesman for Mittal stated: "If Arcelor decides to distribute extra cash to shareholders, we will consider that as an advance payment on our offer and adjust the cash component of our offer accordingly."