The board of Arcelor, the pan-European steel group fighting off a hostile €22bn (£15bn) bid from its rival Mittal, is increasingly reconciled to losing a key element of its defence strategy at the hands of shareholders this week and is desperately searching for alternatives.Arcelor investors, who are angry at the terms of the proposed merger with Russia’s Severstal, are due to vote down the board’s plans to buy back €6.5bn of shares at an extraordinary meeting in Luxembourg on Wednesday amid reports that Mittal will win its four-month battle.
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In a story over at the Telegraph Arcelor, has denied that a tie-up with Russian rival Severstal is under threat after several shareholders moved to veto both the deal and a proposed €6.5bn (£4.4bn) Arcelor share buyback. We’re both still entirely committed to this transaction,” said a spokesman. “We have an investor trip to Cherepovets north of Moscow planned to see a Severstal steel facility [today] and Tuesday.”
But observers have warned that Severstal oligarch Alexei Mordashov could yet back away from the deal, which has been widely billed as an Arcelor-led buyout, after it met with steep opposition from some shareholders.
Speculation is also mounting that Arcelor will delay a vote on the buyback due on Wednesday.