Closed doors

London, Jan. 29: Arcelor’s board of directors today rejected a hostile takeover bid by Mittal Steel, saying it would hurt the group, its shareholders, employees and customers.

“After a thorough review and analysis of the elements at its disposal, the board has swiftly concluded that Arcelor and Mittal Steel do not share the same strategic vision, business model and values,” Arcelor said in a statement issued after an extraordinary board meeting in Luxembourg.

“The board of directors has resolved that it unanimously rejects Mittal Steel’s unsolicited proposal which it considers hostile,” the statement said.

Arcelor asked shareholders not to tender their shares in the offer, which values them at 28.21 euro ($24.50) each. Mittal Steel launched a hostile takeover bid for its closest rival on Friday.

Mittal said the deal would create the world’s first 100-million-tonne-plus steel producer, with a market capitalisation of $40 billion (32.7 billion euros). It anticipated annual synergies of $1 billion (816 million euros).

The Arcelor board said it believed its current strategy offered the best guarantee of value creation for its shareholders. The Mittal bid was launched shortly after Arcelor offered a significant premium to win Canadian steelmaker Dofasco Inc in a bidding war with Germany’s Thyssenkrupp AG.

On Friday, January 13, Mittal, the world’s biggest steelmaker, invited the man representing the number two in the business, Guy Doll?, chief executive of Arcelor, home for dinner ? and popped the romantic question, “We are so alike, so complementary, we’d be so good together ? will you marry me?”

It was an offer that the stunned Doll?, who had not expected the overture, found easy to reject.

Mittal, a 55-year-old tycoon who has all the passion of a suitor deeply in love with the idea of uniting Mittal Steel and Arcelor to create a global giant capable of producing more than 100 million tonnes of steel a year, was not easily put off. He tried twice more to woo Doll? but the latter said, “No.”

On Friday in London, Mittal and his crown prince, Aditya, 29, went ahead, anyway, and announced their takeover bid at a packed news conference. They described their move as a “merger”, which would be good for both sides, but the steel world has uniformly called his takeover bid “hostile”.

The governments of France, Spain and Luxembourg were rallied to oppose the match by lobbies within Arcelor because the group employs the nationals of these three European countries.

Mittal had told The Sunday Times that he intends flying to Paris in an effort to reassure the French government the deal would involve no job losses. On Friday, both father and son called their plans “a win-win situation”.

The Indian media might proudly depict Mittal as a Calcutta Marwari made good ? very good, in fact ? but at the press conference, held at the headquarters of BAFTA, he projected himself as a confident citizen of the world, on first-name terms with key British financial journalists who specialise in steel.

“You always ask such difficult questions,” he remarked disarmingly to one.

No wonder one Indian journalist complained: “When we ask for an interview, his people don’t say, ‘No,’ but ‘he’s travelling just now, we don’t know when he will be back’.”

Meanwhile, as the 18-member board of Arcelor prepared to begin their deliberations on Sunday on how the Mittal bid should be countered, agencies reported that three of its “employee representatives” had said they would argue for a rejection.

“I had contacts with all of the other representatives of the employees and we will ask the board to oppose it (the offer) by all means,” said Michel Marti, employee representative for France.