Steel

Arcelor seeks rival deal to thwart Mittal

22 May 2006

There s nothing wrong with exploring alternatives like buying Russia s Severstal. But shareholders must be given a say. What s more, the scheme being considered with the Russian group isn t likely to create as many synergies and raises thorny questions.

Mittal raises Arcelor offer by a third

18 May 2006

The new mixandmatch offer is not only more generous. Mittal has scrapped its twotier share structure. Arcelor will need some really strong reasons such as an attractive white knight to say no.

Mittal increases pressure on Arcelor

9 May 2006

By offering better terms and improved governance in exchange for a recommendation, Mittal has gone some way towards answerings its critics. In setting still more preconditions before agreeing to meet, Arcelor is looking obstinate.

Teck Cominco’s C$18bn bid puts Inco on the spot

8 May 2006

Canadian miner Inco will be hard pressed to reject its rival s offer. Its own shares have underperformed since it bid for Falconbridge. That deal s not only been bogged by regulatory worries, it looked like Inco was going to have to pay more. Selling out is preferable.

Are Arcelor top managers blindly loyal?

25 Apr 2006

All 350 of them have signed up to the antiMittal crusade. That s a show of unity from the bureaucrats that would make any dictator proud. If the managers were really so ready to rush to judgement, they would need a real shakeup. But some may secretly harbour other ideas.

Arcelor shareholders should reject board

20 Apr 2006

The steelmaker isn t letting its owners vote directly on its defence plan. The best they can do is not to reelect the directors. It s ironic that Arcelor has thrown away its best competitive advantage in the fight with Mittal its corporate governance.

Copper price out of touch with mining reality

10 Apr 2006

A price of $2,800 less than half of today s level would be high enough to get production up to the future level of demand. But a small shortage and easy money have pushed up the price. Money, not metal demand, is likely to pop the bubble.

Arcelor turns back on own shareholders

4 Apr 2006

The European steelmaker has ripped up its promise to mount a valuebased defence in favour of blatant obstructionism. It s putting Dofasco, the recently acquired Canadian steelmaker, in trust. That s a blow to Mittal s hostile bid.

Arcelor considers Dofasco poison pill – WSJ

24 Mar 2006

The embattled steel group may try to stop Mittal from selling on Dofasco, a Canadian group Arcelor has just acquired, to ThyssenKrupp. Such a scheme would make a mockery of Arcelor s claims that it is acting in shareholder interests rather than just trying to block Mittal.

Arcelor shouldn’t sell minority stake to Russian oligarch

22 Mar 2006

Reports that Russia s third richest man, Vladimir Lisin, wants a 15% stake in the Luxembourg steel company are faintly worrying. If he buys in the market, fine. But if Arcelor sells him shares, that could block Mittal s hostile bid, hurting other shareholders.

Luxembourg should resist temptation to block Mittal

21 Mar 2006

Throwing obstacles in the way of Mittal's takeover of Arcelor would amount to cutting off its nose to spite its face. The tiny country thrives because it is viewed as an open financial centre. Meddling in the free market would put that reputation at risk.

Arcelor sends mixed message about defence

14 Mar 2006

The Luxembourg Chamber of Commerce wants a takeover law that forces Mittal to offer cash for the grand duchy s largest employer, Arcelor. The Chamber s chairman is Michel Wurth, who is also Arcelor s deputy CEO. But Arcelor has said it doesn t want regulatory help.

Goldman’s Anglo conflict called into question

10 Mar 2006

The bank was hired to reduce the miner s $7bn AngloGold stake. But while waiting, it placed $2bn of Gold Fields shares on behalf of Norilsk. Putting Norilsk ahead of Anglo could make it harder to sell the AngloGold shares. It wouldn t be surprising if Anglo was miffed.

Mittal doesn’t want to stop with Arcelor

3 Mar 2006

A takeover of Arcelor would double Mittal s size. But it wants to double again before 2015, according to its leaked merger plan. Arcelor s promised 15% ebitda gain by 2008 looks pale in contrast. Investors must decide if Mittal can manage the growth.

Mines are becoming more valuable

1 Mar 2006

Copper, coal and iron ore are in hot demand and short supply. With money easy, high prices and high profits could last through 2007. And the next downcycle should be brief. That could make Mittal, which owns its own iron ore, a more attractive suitor for Arcelor.

Pilkington gives in to NSG in £2bn deal

27 Feb 2006

The UK glassmaker will be bought out for cash by its much smaller rival. Initial resistance pushed up the price by 10%. At 15 times earnings, the terms are reasonable. But the deal would have made more sense the other way around.

Dam holding back trans-European M&A has burst

24 Feb 2006

The current robust takeover scene is spurred by a growing perception that governments can t hold back crossborder deals, even hostile ones. At present, Europe is in the daredevil phase of the wave. Soon it will enter the domino phase, as rivals fear being left out of the game.

Mittal is trying to grab Arcelor on the cheap

17 Feb 2006

Its offer effectively values its own paper at a 34% premium to Arcelor s. Some premium is justified, but not that big a one. That said, to get a better price, Arcelor will have to produce a proper defence.

Weak Mittal results won’t damage Arcelor bid

15 Feb 2006

Mittal s shares look cheap at seven times trailing earnings. Arcelor shareholders are not likely to shun this paper. The Londonbased steelmaker reported a 58% fall in quarterly profits. But an 18% ROE in a bad period is a sign of strength.

Arcelor needs proper financial defence

13 Feb 2006

Merely whingeing about how Mittal is trying to buy it on the cheap with overvalued paper however valid won t be enough. It also needs to give its own investors some red meat, to show that it really is working in their interests.