Luxembourg, India spar over Arcelor takeover bid
Thursday, March 30, 2006
Several weeks ago Netherlands based company Mittal Steel made a takeover bid for Arcelor, prompting legislation from Luxembourg (5.6% owners of Arcelor, the largest stockholders) and cries of discrimination from India.
Mittal is owned by the world's fifth wealthiest man, Laskshmi Mittal, an Indian. After the takeover bid, the Luxembourg Chamber of Commerce attempted to introduce new rules that would stop companies with less than 25% of their shares in free float from making a cash and bid offer for a company whose location is in Luxembourg. India news reports then claimed that this was a discriminatory action because Laskshmi Mittal is an Indian.
Luxembourg officials have disputed this, stating that their actions were only due to the need to comply with EU legislation. The country's minister for economy and foreign trade, Leannot Krecke, stated, "The government will have no role in impeding the bid. We intend to bring the takeover bill in May to put in the best international practices in our economy." Krecke also stated that a similar bill will have to be brought to the national governments of each of the 25 EU member nations so that they complied with EU legislation.
Word of New Delhi's displeasure with Luxembourg's stance seems to have been translated to Luxembourg during a meeting that the finance ministers of both countries had in India.
Meanwhile, Mittal has announced that it is prepared to cut the cash portion of its buyout offer. Mittal will do so if Arcelor increases its dividend to shareholders above the 80 cent market consensus. A spokesman for Mittal stated: "If Arcelor decides to distribute extra cash to shareholders, we will consider that as an advance payment on our offer and adjust the cash component of our offer accordingly."
Sources
[edit]- "Mittal set to cut bid if Arcelor lifts payout" — Reuters, March 30, 2006
- Prabhakar Sinha. "'New legislation due to EU directive'" — The Times of India, March 30, 2006
- Chris Noon. "Luxembourg Minister: We're Not Trying To Stop Mittal" — Forbes, March 28, 2006
 |
This page has been automatically archived by a robot, and is no longer publicly editable.
Got a correction? Add the template {{editprotected}} to the talk page along with your corrections, and it will be brought to the attention of the administrators. Please note that the listed sources may no longer be available online. |