Guy Dolle said the Arcelor board has decided that Friday's offer by Mittal Steel, to take control of the Luxembourg-based steel-maker and create a huge steel company with output three times higher than its closest rival Nippon was "150 per cent hostile."
In an interview on Monday in Les Echos, to a French financial daily, Thierry Breton, the French finance minister said he was surprised that - given the size of the project - there had been "no prior contact between Mittal and any of the European countries in which Arcelor operates."
However, Breton also insisted on Sunday during a television interview that he was not against hostile bids for French companies.
According to a report in the Financial Times, London, Dolle said Mittal, chairman and owner of Netherlands-based Mittal Steel, had broken "the unwritten rules" of conduct in such bid tussles by raising the matter briefly with him at a dinner in London on January 13, but without making available any detailed documents or figures.
"We had a five-minute discussion (on the idea of a merger) but that was all," said Dolle. Pointing out that the board of directors of Arcelor had on Sunday unanimously rejected the Mittal Steel offer as "hostile", Dolle noted he would be starting talks with shareholders to try to convince them that the existing Arcelor management could do a better job than Mittal's executives, and would create "better shareholder value".
He said Arcelor's corporate governance - with an 18-person board of six nationalities and a liquid shareholding in which no single organization had a large stake - was "on a different planet" to Mittal's.
While Mittal has said he would like to make the offer into a "friendly" one with "ample space" in a new company for Arcelor executives, Dolle retorted, "It's too late for that." He said he was prepared for a long fight - up to six months - to keep Arcelor under its current structure.
Mittal said it would be up to shareholders to decide. If the takeover were to go ahead, the new company would have global sales of $69 billion and an estimated market capitalisation of $40 billion, with annual output of steel of some 110 million tonnes.
However, Dolle said he was certain that "a takeover by Mittal would lead to job reductions among Arcelor's 77,000 workers in the European Union - roughly 30 per cent of whom are in France. He said that he did not want to estimate how many jobs could be lost at Arcelor.
Referring to Mittal's observation that an enlarged Mittal Steel would become a "new European champion" in steel, Dolle said, "Arcelor is a European champion already. We are the Airbus of steel (a reference to the European aerospace manufacturer). We don't need Mittal."
Mittal Steel is holding talks with European governments before deciding whether to increase its audacious £12.7 billion hostile bid for rival Arcelor.
Arcelor had said on Sunday: "After a thorough review and analysis of the elements at its disposal, the board has swiftly concluded that Arcelor and Mittal Steel do not share the same strategic vision, business model and values."
Arcelor, the world's second largest steel group with a turnover of £20 billion in 2004, added the board had "expressed its concern regarding the severe consequences that Mittal Steel's proposal could have on the group, its shareholders, employees and customers".
It urged shareholders not to tender their shares into the proposed offer, saying: "The board of directors confirms its full confidence in the management and employees of Arcelor and supports their ongoing efforts to create value for all stakeholders."
Mittal has become the world's largest steel group, partly by pursuing other companies, gobbling up 20 in the past five years.
Mittal will be in Luxembourg on Tuesday for further talks with Jean-Claude Juncker, the premier. The grand Duchy is Arcelor's biggest shareholder, with a stake of 5.6 per cent and the steel company is its biggest employer with 6,000 workers.
Mittal is also expected to talk to European commission officials later in the week although he has played down competition issues on the grounds that there is little overlap between the companies.
Mittal's strength is in the US, central and eastern Europe and central Asia, while Arcelor's main operations are in western Europe and South America.