Paris: Mittal Steel is prepared to sweeten its $25.53 billion offer for European steel maker Arcelor, provided the board of the Luxembourg-based firm recommends the hotly contested bid.
"In the context of a recommended transaction, Mittal Steel is prepared to revise the value of its offer," Mittal Steel said in a statement on Tuesday.
Arcelor shares were up 2.4 per cent at a fresh high of 36.14 euros and Mittal up 1.85 per cent after the news.
Mittal said it had sent a letter to Arcelor Chairman Joseph Kinsch in which it said it was prepared to offer "significant corporate governance changes" including the introduction of one class of shares, and that it was ready to revise the bid terms.
This could lead to the Mittal family relinquishing majority control over the merged company, as they now have almost full control over Mittal Steel via a special class of shares.
Such a move would allay some reluctance by institutional shareholders over the Mittal corporate governance structure.
The world's two biggest steel makers have been involved in a war of words for months over plans by steel magnate Lakshmi Mittal to buy Arcelor and forge an industry giant with control of 10 per cent of the global steel market.
Arcelor management has been fighting tooth and nail against the bid, which was unveiled on January 26 but still needs regulatory clearance.
Mittal has offered four new shares and 35.25 euros in cash for five Arcelor shares with a limit to the cash portion at 25 percent of the total value.
Willing to review
Kinsch told Arcelor's annual meeting on April 28 that the board would be willing to review a Mittal offer that fairly reflected the value of Arcelor, and executives also said a full-cash offer would make it easier to value the bid.
Mittal said that it had sent a letter to Kinsch on April 28 with several proposals. Arcelor would get the right to name six out of 12 Mittal directors, a one-share one-vote capital structure and Arcelor would name three out of six members of the management board.
Mittal said it arranged a courtesy telephone call with Kinsch on May 8 - Armistice Day in France - but Arcelor replied with a news release saying it still lacked key information. On Tuesday, Arcelor had no comment.
Mittal will hold a news conference ahead of its annual shareholder meeting in Rotterdam. On Monday, Arcelor said Kinsch was willing to sit down for a meeting with Lakshmi Mittal, chairman and chief executive of his company.
But he first needed specific information as Arcelor lacked details to assess Mittal's $25.5 billion takeover bid. Arcelor Chief Executive Guy Dolle has suggested that Arcelor might consider Mittal's approach if there was a cash offer that fully recognised the value of Arcelor.
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