Four months after NRI tycoon Laxmi Narayan Mittal made a hostile bid for Luxembourg-based Arcelor, managements of the two steel giants have held negotiations and will meet again soon for substantive talks despite Mittal Steel's insistence it would not raise its euro25 billion bid offer.
The breakthrough for the talks comes after Arcelor's supervisory board instructed its management board to negotiate with Mittal on Tuesday.
"We have moved from a very negative involvement to a positive involvement. We hope this kind of dialogue can lead to a satisfactory conclusion for the shareholders of Arcelor as well as Mittal Steel," Mittal said.
He had already made a compelling offer to Arcelor's shareholders and had no plans to offer more, he said.
However, advisers said there could be some room for further unspecified improvements to corporate governance, which could persuade Arcelor.
News of an early meeting came as Mittal released details of the company's business plan, which contains a very aggressive earnings target, 70 per cent higher than that achieved in 2005.
Mittal expects underlying profits of $9.9 billion within two years and predicts steel prices to rise by $30 to $60 a tonne within six months.
Reacting to the Mittal's projections, Arcelor said the outlook was unreasonably bullish.
Under the same assumptions, Arcelor said its forecast for its own profits in 2009 would rise from euro7 billion to euro8.9 billion.
"Arcelor is convinced that it is one of the most resilient global steel producers. However, in order to deliver on its commitment to the market, it has purposely applied reasonable and conservative assumptions in its value plan," the company said in a release on Wednesday.
Mittal said he would make himself available for the talks if Arcelor Chairman Joseph Kinsch and its Chief Executive Guy Dolle attended the talks.
Mittal and Dolle are yet to discuss the offer. But there are now just three weeks left before the bid deadline.
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