Arcelor is willing to study Mittal Steel's improved takeover offer and business plan to create a global steel giant, Arcelor said on Sunday, opening the door to possible talks with its suitor.
"The board of directors will examine the contents of Mittal Steel's revised offer as soon as it shall have been approved by the CSSF (Luxembourg's financial regulator)," Arcelor Chairman Joseph Kinsch told reporters after a meeting of Arcelor's board.
Until Sunday, Luxembourg-based Arcelor, the world's No.2 steelmaker, had firmly rejected the advances by global sector leader Mittal.
The slight softening of its stance comes after Mittal raised its hostile cash-and-equity bid by a third on Friday and dropped a key demand for family control over the combined global steel giant, just one day after the bid was formally launched.
Mittal's revised offer was worth 23.4 billion euros ($29.8 billion) at Friday's market close.
"The board of directors expressed its wish to examine Mittal Steel's business plan ... in order to be able to assess the industrial merits as well as the value of the Mittal Steel shares offered in exchange," Kinsch said.
Mittal Chief Executive Lakshmi Mittal had proposed sending the company's business plan in a letter dated May 16, Kinsch said on Sunday.
The Arcelor chairman earlier this month said he had rejected requests from Lakshmi Mittal for a meeting because the latter had not sent all essential information, notably a business plan.
But Kinsch, reading from a statement, gave no indication as to whether Arcelor's board would accept or reject the new offer.
"The board of directors also reiterated the management board's mandate to present it with all options, which are in the interests of all stakeholders," he said.
Media reports have said Arcelor was seeking a white knight to rescue it from its unwanted suitor. Possible candidates have included Russian tycoon Vladimir Lisin and Russia's Magnitogorsk Iron & Steel Works (MMK).
Mittal's move on Friday came after the value of its initial offer fell more than 10 percent behind the market worth of Arcelor, as Arcelor announced a buyback of its own shares at above-market prices to ward off Mittal.
Mittal, 87 percent owned by the family of Chief Executive Lakshmi Mittal, aims to create a producer of 100 million tonnes of steel per year — more than three times the size of its closest rival — by combining the largest and second-largest companies in the fragmented steel industry.
But its ambitions had been fiercely resisted by Arcelor. The two have traded verbal blows since Mittal's takeover plan was launched on January 27, while European governments, fearing job losses, have expressed reservations.
Arcelor had urged shareholders to preserve its independence and has promised an increased 2005 dividend in an effort to win their support.
Kinsch said Arcelor had been right to reject Mittal's initial approach.
"The new offer by Mittal Steel demonstrates the pertinence of the positions taken by the board since January 29," he said.
In an interview in a French newspaper to be published on Monday, Lakshmi Mittal expressed confidence that he would succeed in taking over Arcelor.
"I am convinced that, given the attractive nature of our revised offer, we will obtain more than 50 percent of the shares," he told La Tribune.
He added he did not think that a Russian white knight's purchase of, say, 25 percent of Arcelor would be in the interests of Arcelor's shareholders.
"For our part, we are absolutely determined to make this link-up happen," he said.