Arcelor Mittal raises offer for Brazilian unit

BRUSSELS, Apr 6 (Reuters) Arcelor Mittal, the world's largest steelmaker, raised its offer for the shares it does not already own in Brazilian subsidiary Arcelor Brasil on Friday.

The company, which owns about 66 percent of the unit, said it would now offer 11.70 Brazilian reais (.75) in cash and 0.3568 class A common share of Arcelor Mittal for each share in Arcelor Brasil.

''This floating reference price after adjustment for dividends and interest on cash would represent a total value which as of April 4, 2007, would be equivalent to 18.89 euros or 51.27 reais,'' Arcelor Mittal said in a statement.

Arcelor Mittal said shareholders could receive the mixture of cash and shares proposed or purely cash, with the value based on the close of Mittal shares in New York on the business day prior to the auction date.

The company said the maximum amount it would pay in cash would be 10.9 billion reais (.35 billion) and the maximum number of shares it would issue would be some 76 million, representing 5 percent of the share capital of Arcelor Mittal.

The company said it would file an amended request to register the offer with Brazilian regulator CVM. The offer would be open for 30 days following CVM's approval.

The revised offer, which appears to meet the demands of CVM, comes after eight months of wrangling with Arcelor Mittal over whether it had to make an offer to buy out the Brazilian unit and over the price it should pay.

In February, CVM ordered the global steelmaker to pay 51.27 reais, based on Arcelor Brasil's average trading price, far higher than the company's initial offer of about 35 reais.

Minority shareholders had called for the price to be determined by the average trading price on the Sao Paulo stock exchange.

However, in March CVM accepted Arcelor Mittal's view that it should use multiples of EBITDA (earnings before interest, tax, depreciation and amortisation) to calculate the offer price.

It said then that Arcelor Mittal should pay about 49.75 reais per share.

The Brazilian regulator has insisted that the steel giant offer to buy out minority shareholders in Arcelor Brasil to comply with local legislation after Mittal Steel's blockbuster billion takeover of Arcelor last year.

Arcelor Mittal wants to cancel the registration of Arcelor Brasil as a listed company.

UNI