The four-month war of attrition between Mittal and Arcelor over the future shape of the global steel industry will come to a head in the next few days when senior executives of both groups meet face-to-face for the first time to dissect Mittal's €22bn (£15bn) takeover bid.
Yesterday Lakshmi Mittal, chairman and chief executive, urged Guy Dollé, CEO, and Joseph Kinsch, chairman of the pan-European steel company to enter a "friendly dialogue" and negotiate directly with him - an outcome "that cannot be precluded", Arcelor insiders said.
Savaging Arcelor's alternative strategy of a merger with Russia's Severstal, Mr Mittal said senior managers are likely to meet "very shortly". But Mr Mittal insisted he had no plans to raise his bid.
As Arcelor reaffirmed the genuine value of its €13bn merger with Alexei Mordashov's Severstal, arguing the case in a 38-page document for increasingly sceptical shareholders, Mr Mittal went out of his way to assuage Mr Dollé's antagonism to himself. "We have a good relationship personally but perhaps there's a change since we made our bid ... In my perception I am still a friend," he said before adding cautiously: "Arcelor has always come up with surprising poison pills; I hope this time the discussions are in good faith."
Opening a new front in the 20-week battle to win Arcelor and create the world's first 100m-tonne steel group, he forecast that, on its own, Mittal would increase its pre-tax earnings this year by $1.5bn (£800m) to $7.3bn and this would jump to $9.9bn by 2008 when his group would ship 66m tonnes of steel. Ruling out any more redundancies on top of the 26,000 voluntary severances already planned, he said savings from the Mittal-Arcelor merger would out-distance those from the tie-up with Severstal.
Arcelor immediately countered saying that, on Mittal's assumptions, its combination with Severstal would yield earnings of €13.1bn by 2008 - or €2.8bn more than set out in its document to investors.
The Luxembourg-based group asserted that the assets Mr Mordashov is contributing, including American and Italian businesses and iron ore/coal reserves, as well as €1.25bn of cash, were genuinely worth €13bn and correctly valued Arcelor's shares at €44 - the price he is paying to acquire up to 38% of the capital.
But Mr Mittal and his team, including son Aditya, his chief financial officer, rubbished the Arcelor estimates drawn up by bankers Morgan Stanley as "entirely fictitious" and insisted their own bid could be worth up to €55 a share.
Roeland Baan, head of Mittal's European operations, ridiculed Severstal's claims to be a global leader of high-quality automotive products. "Severstal is basically a large operation in Russia," he said.
Aditya Mittal, pouring scorn on the multiples used by Arcelor to value Severstal, opened a second front by urging its shareholders to reject the Russian deal when they meet on June 30. He claimed that sentiment was strongly heading Mittal's way, with 30% of investors demanding an alternative vote on June 30 when he had expected only 20%.
Mittal is counting on rebel Arcelor shareholders to overturn their board whatever the outcome of the talks with executives.
