Posted on 01/31/2006 5:17:45 PM PST by CarrotAndStick
LUXEMBOURG, February 01: Luxembourg's prime minister vowed on Tuesday to use "all necessary means" to fend off a hostile $23 billion bid by steel magnate Lakshmi Mittal for Arcelor, one of Europe's biggest companies.
Speaking to the Grand Duchy's parliament after meeting with the Indian-born billionaire, Jean-Claude Juncker criticised him for not consulting him ahead of time, adding that he did not think a deal was in the best interest of Europe.
"I am determined -- as is the government -- to do everything to preserve everything that we have worked for and that we believe in ... by using all necessary means to fend off the hostile (takeover)," he said.
"We are of the opinion that if you want to build something together ... then you have to have prior consultations with those that you want to build something together with," he said.
Juncker's comments echoed those made on Monday by French Finance Minister Thierry Breton, who complained about a lack of advance warning.
A deal between Mittal Steel and Arcelor would bring together the world's top two steelmakers, giving them a global market share of about 10 percent.
But the takeover bid has raised fears of jobs losses in Europe where Arcelor, the world's second biggest steelmaker, has a big presence.
Arcelor's French workforce of 28,500 makes up 30 percent of its staff. In Luxembourg, where it is based, Arcelor has a staff of about 7,500, making it the largest private employer there.
Arcelor was created from a merger of steel firms in France, Spain and Luxembourg in 2002.
"NO NEED TO RAISE BID"
Mittal Steel launched its bid on Friday, valuing Arcelor at 28.21 euros a share. Arcelor shares have since risen to 29 euros but the implied value of Mittal's bid has risen to around 30.5 euros per share, signalling the outcome is not clear-cut.
Mittal told Reuters Television in an interview on Tuesday he saw no need to raise his bid. "Since we have proposed this offer, our stock have further gone up by 4 or 5 percent. That means the shareholders have liked this proposal."
Asked by reporters in Paris later in the day whether he excluded raising his bid, he said: "Yes".
Mittal has visited Luxembourg and France this week as part of a campaign to win support for his bid in Europe and gone to great lengths to ease politicians' concerns, saying he would respect Arcelor's commitments to its workers.
He has even proposed putting the merged company's headquarters in Luxembourg.
But his reassurances did not stop France's Breton from making his most vitriolic comments yet about the bid on Tuesday.
"I have seen many operations like these in my life (and) I would like to tell you that it is the first time I see one that appears to be so badly prepared," he told French parliament.
Mittal's family owns more than 80 percent of Mittal Steel.
Arcelor Chief Executive Guy Dolle has rejected Mittal's offer, saying the two companies were not compatible. But he has declined to give specifics about Arcelor's defence strategy.
European Union officials appeared less concerned about the bid, with Internal Market Commissioner Charlie McCreevy saying he saw no trouble for the deal on internal market grounds.
Competition Commissioner Neelie Kroes said she would review the deal only on competition grounds.
Mittal also plans to meet Spanish officials.
Arcelor shares ended down 2.86 percent at 28.90 euros in Paris. Mittal fell 1.65 percent to 29.20 euros in Amsterdam.
The DJ Stoxx basic manufacturers sector index closed down 1.17 percent at 455.48.
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