Arcelor bid faces Luxembourg test

Brussels, March 21 | Updated: Mar 22 2006, 06:47am hrs
Mittal Steels 19-billion-euro ($23-billion) bid for Luxembourg-based rival Arcelor faces a key day on Wednesday when the countrys parliament decides whether to introduce new rules which could obstruct the offer.

Two months after the unsolicited bid was launched, to the dismay of Luxembourgs government and Arcelor, Mittals founder and chief executive Lakshmi Mittal said last week he was really worried by what could be a move to block the bid.

India-born Mittal heads a multinational company which is headquartered in London, registered in the Netherlands and listed in Amsterdam, and the bid is seen as another test of Europes laws for a single internal market at a time when Spain, France and Poland are also opposing takeovers of key national companies by firms from other European countries. Members of the Luxembourg parliaments finance committee are keeping their cards close to their chests.

Everything is possible, you will just have to wait until Wednesday, said John Castagnero, a member of parliament and Arcelor board member, but not on the committee.

Already one proposed alteration to the takeover laws put forward by Luxembourgs Chamber of Commerce which is led by an Arcelor executive has caused controversy. It would have required a bidding company to have at least 25% of its shares traded publicly on the market in order to use its stock to buy anotherlistedcompany.