Mittal Steel expects to launch a long-awaited offer for Arcelor within days, it said on Friday, even as Arcelor unveiled its latest attempt to thwart a tie-up of the world's biggest steel makers.
Mittal, global number one, said it expected to open its cash-and-share offer for Arcelor, currently worth 20.8 billion euros ($26.8 billion), early next week - more than three months after announcing its intentions.
"We expect it to be the early part of next week, but we have been wrong before. We are keeping our fingers crossed," Chief Financial Officer Aditya Mittal said, after Mittal Steel reported clearance from US competition authorities.
The company also expects clearance from European regulators soon, but needs the green light from several stock exchanges, which it also believes is imminent.
Dutch-registered Mittal, 87-percent-owned by the family of Lakshmi Mittal, the world's fifth-richest man according to Forbes magazine, is aiming to create a 100-million-tonne producer, more than three times the size of its closest rival.
But its ambitions are being fiercely resisted by Luxembourg-based Arcelor, and have also sparked a political storm, with some European politicians fearing job losses.
Arcelor said on Friday it would press ahead with a 5-billion-euro ($6.4 billion) share buyback programme, which it had previously said would only be implemented if Mittal's offer was withdrawn or failed.
Arcelor deputy chief executive Michel Wurth told Luxembourg radio the tender for up to 150 million shares was "an answer to the Mittal offer, because it allows the board to establish the value of our shares and offer shareholders that price".
A LONG BATTLE:
Aditya Mittal, son of Lakshmi, questioned the legitimacy of Arcelor's plans.
"A tender offer simultaneous with ours is illegal in many jurisdictions," he told reporters. "So we have lots of questions that need to be answered by Arcelor and by the regulators as to how they plan on doing this.
"This complicates, clearly, and frustrates everyone, because suddenly you have the potential to have two tender offers, which creates confusion in the market."
Mittal Steel said its offer would automatically adjust to take account of the share buyback and also reiterated it was prepared to sweeten its bid in exchange for a recommendation from Arcelor's board.
But Aditya Mittal played down hopes the firm might significantly improve the cash element of its proposal.
"We would revise our offer if the transaction was recommended," he said on a conference call. "That does not mean the structure of the transaction would change."
Mittal Steel was prepared for a long battle, he added.
"Our patience is very long. I am still young, as all of you know," the 30-year-old said.
Arcelor Chief Financial Officer Gonzalo Urquijo said hedge funds - often short-term investors and more ready to accept take-over offers than institutional shareholders - owned no more than 15 to 20 percent of Arcelor.
On January 27, Mittal Steel announced a plan to offer 0.8 new shares and 7.05 euros for every Arcelor share, a deal it said was worth 28.21 euros per Arcelor share and represented a 27 percent premium to the closing price on January 26.
With Mittal Steel shares down 3.5 percent at 30.95 euros by 1400 GMT on Friday, the offer was worth 32.45 euros per Arcelor share, an 8 percent discount to the Arcelor stock price, which was down 0.8 percent at 35.18 euros.
Both Mittal and Arcelor also reported lower first-quarter profits on Friday, largely due to lower steel prices, but both also sounded upbeat about prospects for the rest of the year.
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