Russia's Severstal is considering launching a counter-bid for steel company Arcelor. An announcement on Sunday said Arcelor had rejected an earlier bid from the Russian company, favouring an offer from India's Mittal Steel.
Lakshmi Mittal, already heading the world’s largest steelmaker and looking to control ten percent of global steel production with plants on four continents, says the takeover is about worldwide industry consolidation.But Mittal ruled out any consolidation involving a three-way tie with Russia’s Severstal, just days ago Arcelor’s white knight and preferred merger candidate.Severstal, headed by Aleksey Mordashov, has said it was “very surprised” that Arcelor had not invited discussion on its revised offer, and that it was reviewing options. Arcelor suggested Severstal would retain a privileged status with the merged Arcelor Mittal, and would receive a fee estimated at 140 million euros for the failure of Arcelor’s original merger proposal. It may take legal action for breach of contract and possibly gain more.Media reports speculate the company has arranged a multi-billion euro loan facility. Analysts contemplate a bidding war.Despite the Arcelor board’s decision, there is still the prospect that its shareholders may be faced with an even-higher bid than that agreed to. A takeover battle raging for five months may still have another twist.