Steel giant Mittal 'set to raise offer for rival'

Mittal Steel was today said to be preparing to increase its offer for Arcelor to more than £18bn to beat off rival interest from Russia.

The Sunday Times said Mittal boss Lakshmi Mittal has held talks with Arcelor chairman Joseph Kinsch and is now close to gaining the backing of the Arcelor board for the controversial takeover.

Such backing would be a major U-turn by Arcelor and could lead to the shock departure of Arcelor chief executive Guy Dolle who has vigorously opposed the Mittal offer.

Mittal was said to be prepared to up its current offer of £17.6bn to more than £18bn to bring the five-month saga to an end.

The report said Mr Kinsch could become chairman of the combined group, which would be the world’s largest steel company capable of producing more than 100 million tonnes of steel a day, three times more than its nearest rival Nippon Steel.

Last week Mittal confirmed it was in “advanced and constructive discussions” with Arcelor which could lead to a deal.

The Arcelor board has already backed an alternative tie-up with Severstal, the Russian steel group run by oligarch Alexi Mordashov, as part of its defence against Mittal’s hostile offer.

According to the Sunday Times, Severstal could take legal action against Arcelor for breach of contract if it now backs the Mittal bid.

And a separate report in the Sunday Telegraph said Severstal was prepared to improve its offer for Luxembourg-based Arcelor in a bid to thwart Mittal.

The offer is thought to involve a special dividend payment to Arcelor shareholders.

Mittal’s hostile offer for Arcelor has faced opposition from European politicians as well as the Arcelor board since it was launched in January.

But Indian-born Mr Mittal, who is Britain’s richest man and runs the Rotterdam-based firm from London, is understood to have agreed to a range of concessions to satisfy his critics.