Mittal confident as Luxembourg mulls Arcelor move

BRUSSELS, Mar 18 (Reuters) Steel magnate Lakshmi Mittal said on Friday he was confident Luxembourg would not torpedo his firm's unsolicited .5 billion planned bid for Arcelor by requiring the world's biggest steel maker to offer only cash.

But a Luxembourg parliamentarian moved to thwart Mittal's plans on the same day Belgium's finance minister indicated the government would take a good look at a 115-page business plan presented by Mittal Steel and urged Arcelor to come up with rival projects.

The Luxembourg Chamber of Commerce, chaired by Arcelor management board member Michel Wurth, has proposed that the Duchy put a clause in its planned new takeover code that would require a bidder to make an all-cash offer if the free float in the shares of the bidder was less than 25 per cent.

The Mittal family owns 88 per cent of the capital of Mittal Steel, and around 96 per cent of the votes, which makes the company's free float less than half this minimum.

''I have confidence that the government of Luxembourg will not make any decision that frustrates this transaction,'' Lakshmi Mittal told reporters on the sidelines of a business conference in Brussels. Luxembourg owns 5.6 per cent of Arcelor.

The head of the finance commitee of Luxembourg's parliament, Laurent Mosar, said the House was considering a free float minimum, but not at 25 per cent.

''There will be an amendment on liquidity but it will not be the one of the Chamber of Commerce,'' Mosar told Reuters.

Eight weeks after Mittal announced its proposed share-and-cash bid, the takeover battle remains in its dress rehearsal phase as bourse regulators still need to approve the bid documents before investors can start to decide the outcome of an offer worth 19.28 billion euros at current share prices.

The bid value is 4.2 per cent below Arcelor's share price. Mittal closed 1.83 per cent up at 28.94 euros and Arcelor was up 1.29 per cent at 31.50 euros. Mittal has limited the cash part of the bid at 4.7 billion euros.

BELGIAN WANTS TO SEE ARCELOR PLAN Belgian Finance Minister Didier Reynders told the French Le Figaro newspaper in an interview published on Friday that the government and the Walloon region, which holds 2.4 per cent of Arcelor, had asked Lazard Bank for an analysis of the Mittal document and invited Arcelor to come up with projects.

''We have known many restructurings in the steel sector, and I remember the upheaval in Belgium because of the closure by Arcelor of some plants. Therefore, I do not see why we should favour one shareholder over another,'' Reynders said.

Arcelor, formed in 2002 by the merger of Arbed, France's Usinor and Spain's Acelaria, has undergone many restructurings and shed hundreds of jobs in the past few years. Usinor had earlier absorbed Belgium's Cockerill Sambre.

In Belgium it employed 15,400 people at end-2005.

In Spain, where Arcelor employs 13,200 which is half the number in France, a Mittal executive promised more output to allay fears of pending redundancies there. ''Not only are we not going to close anything in Spain, we want to increase production,'' Mittal Europe chief Roeland Baan told La Gaceta.

BOARD MEETING The board of Arcelor met in Luxembourg to review indications of shareholder support for the defence against Mittal's planned bid, which it has declared hostile.

Board member John Castagnero told Reuters following the meeting that he was feeling ''more optimistic than ever'' about the group's effort to fend off the hostile bid.

France, whose Finance Minister Thierry Breton was one of the most vocal opponents of the takeover deal when it was launched on Jan.

27, said on Friday it had not yet received the 115-page business plan that Mittal has presented to the other Arcelor main home states of Belgium, Luxembourg and Spain.

REUTERS SD SSC1415