Mittal steps up

18 May 2006 By Hugo Dixon Follow @hugodixon

The new mixandmatch offer is not only more generous. Mittal has scrapped its twotier share structure. Arcelor will need some really strong reasons such as an attractive white knight to say no.

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Mittal Steel has increased its offer for Arcelor by 34%. It has also agreed to abandon its twotier share structure and adopt a system of one share for one vote.

The new mixandmatch offer consists of one Mittal share for every Arcelor share plus E11.10 of cash. The original offer was 0.8 Mittal shares for every Arcelor share plus just over E7 of cash.

Arcelor shareholders will also have the option to take all shares at the ratio of 17 Mittal shares for every 12 Arcelor shares. Alternatively, they can take E37.74 a share in cash. These alternatives are subject to Arcelor shareholders in aggregate receiving 29.4% of the total consideration in cash and 70.6% in stock.

The total cash consideration will be E7.6bn. After the offer, the Mittal family's stake will fall to 45%.

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