Mittal won't meet with Arcelor management

New York, Mar 15: Senior Mittal Steel executives on Tuesday (Mar 14, 2006) ruled out sitting down face-to-face with their counterparts at Arcelor to persuade them to accept Mittal's billion hostile bid.

Instead, they stressed that Arcelor shareholders were the main targets in their attempt to acquire the world's No. 2 steel maker.

''Arcelor management has always said 'Send us your plans,''' said Chief Financial Officer Aditya Mittal. ''But we don't believe the postal service will make this transaction friendly.'' Asked during a presentation to Wall Street analysts whether Mittal would make its offer directly to Arcelor management, he said Mittal's position had not changed. His father, Chief Executive Officer Lakshmi Mittal said: ''We have had consultations on the steel industry in general, but not on this transaction.'' Arcelor CEO Guy Dolle has rejected the offer, but Mittal claims Arcelor shareholders and also some mid-level executives favor the acquisition. Arcelor says discussions with 50 percent of its shareholders show a ''huge majority'' oppose it.

On Monday, in a rebuff to Mittal, 350 Arcelor executives issued a statement unanimously rejecting the hostile bid.

At Tuesday's meeting in Chicago, where Mittal USA is headquartered, the Mittals addressed analysts on the latest stop in the company's charm offensive to win over the investment community for its move on Luxembourg-based Arcelor.

The meeting was Webcast and monitored in New York.

Rotterdam-based Mittal is attempting to persuade Arcelor shareholders that they would benefit from the transaction.

Under Mittal's offer, Arcelor shareholders would get four Mittal shares and 35.25 euros for every five Arcelor shares.

Two weeks ago, Aditya Mittal said Arcelor shares were worth 36 percent more than their previous all-time high.

''Talking about the premium, you have to be careful, since it excludes the dividend potential,'' he said on Tuesday. ''The premium is about half if you exclude that.

''Our shares are significantly undervalued, but we believe as we educate our investor base, shareholders will begin to realize the value inherent in our stock.

Lakshmi Mittal said he could have made a lower offer for Arcelor last year, but the company was focused on other transactions, including integrating ISG with Mittal, the acquisition that formed Mittal's U.S. operations.

Asked about future mergers or acquisitions, Lakshmi Mittal said: ''China and India are clearly our focus, but we do not want to disclose anything else.'' On Mittal's vision of a combined company producing 150-200 million tons per year, Aditya Mittal said growth in Brazil, central Europe and India and China would bring it to 150 million by 2010. Based on a growth rate of 14 percent, 200 million by 2015 was realistic.

A combined Arcelor-Mittal would start with 107 million tons, based on 2004 figures. Japan's Nippon Steel Corp. and JFE Holdings Inc. and South Korea's POSCO Co. Ltd. trail at around 31 million tons each.

''Ten years from now, half of global production will come from China and India,'' Aditya Mittal said.

REUTERS