January 29, 2006	Sunday	Zilhaj 28, 1426

LUXEMBOURG, Jan 28: Arcelor’s board will meet on Sunday to decide on a response to Mittal Steel’s surprise hostile bid, a board member told Reuters on Saturday, adding he expected the group to reject the offer.

Mittal, the world’s biggest steel maker, made an unsolicited bid of $23 billion for Arcelor on Friday, sending shares in the European market leader rocketing more than 40 per cent.

The move by the group, 88 per cent owned by multibillionaire steel magnate Lakshmi Mittal, was seen by analysts as Mittal’s way of addressing over supply in the industry.

It is widely expected to prompt further consolidation in the sector.

The eighteen-strong board of Arcelor, which described the bid as hostile, was expected to discuss how to avoid the takeover when they meet at the company’s headquarters in Luxembourg, ahead of a news conference on Monday in Paris.

“Tomorrow, alternatives need to be found,” one board member told Reuters, speaking on condition of anonymity. “I personally cannot at all imagine that Arcelor would respond positively to the offer,” he added.

An Arcelor union representative said he also expected the group to give Mittal the cold shoulder and not just hold out in the hope of a sweetened bid.

“I don’t believe they will negotiate the price,” said representative Patrick Auzanneau. “The company is not like that.”

Rotterdam-based Mittal offered cash and shares worth 18.6 billion euros to create a company capable of producing 100 million tons and reaping annual sales of more than $69 billion.

An extra sting for Arcelor was Mittal’s announcement that it would sell Canada’s Dofasco to Germany’s ThyssenKrupp. Arcelor had recently won a fierce bidding war against the German group for Dofasco.

Mittal’s bid is unlikely to be greeted favourably by the governments of France, Luxembourg and Spain — the home countries to the group formed by a three-way merger of Aceralia, Arbed and Usinor in 2002.

French business daily La Tribune quoted Finance Minister Thierry Breton expressing the French government’s “concerns” about the possibility of Arcelor being taken over.

Local Belgian daily La Libre Belgique cited Jean-Claude Marcourt, economics minister for the French-speaking Wallonian region of Belgium, saying that its holding in the company was not just financial but strategic when it comes to discussions about employment in the region.—Reuters