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Severstal has given steel giant Arcelor SA information about its corporate structure and governance system
Severstal [RTS: CHMF] has given steel giant Arcelor SA information about its corporate structure and governance system, the Russian steelmaker said Friday. Arcelor's board of directors has postponed discussion of a possible merger with Severstal or with world no.1 Mittal Steel until June 25. Mittal announced in May that it was seeking to take over Luxemburg-based Arcelor to create a steel-producing giant, but Arcelor resisted the bid and later in the month said it wanted a merger with Severstal to establish "the world's steel champion and most profitable steel company." On June 22, Severstal's top executives met with Arcelor shareholders, including representatives of Carlo Tassara International, Under Capital, Fortis Global Industry Group, and other funds. The Russian company said Arcelor shareholders were able to see for themselves that the quality of its assets was up to the finest international standards and that Arcelor's merger with Severstal was preferable to the hostile takeover bid by Mittal Steel. Arcelor said previously it would consider a new proposal on the merger from Severstal boss and principal shareholder Alexei Mordashov. Under the new proposal, Mordashov will receive 210 million new Arcelor shares - down from the previous 295 million - which represents approximately 25% of the merged company, against the previous 32%. He will be free to vote with his shares in line with normal shareholder practices and the standstill and lockup provisions will be eliminated. "The new conditions are far more attractive to Arcelor shareholders," Severstal said in a news release. It said Arcelor shareholders would receive an additional 2 billion euros (about $2.6 bln) under the new deal.
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