European firm Arcelor officially rejected yesterday a hostile takeover bid worth 25 billion euros (US$32.4 billion) from Mittal Steel, the world's largest steelmaker.
Arcelor said in a statement on its Web site that the offer was "inadequate as it continues to undervalue Arcelor" and recommended shareholders agree instead to a proposed merger between Arcelor and Russia's Severstal.
"The Arcelor board notes that the revisions to Mittal Steel's offer announced on May 19, 2006, demonstrate that Mittal Steel's initial offer undervalued Arcelor," the board said.
"Notwithstanding the increase in the consideration offered by Mittal Steel, the Arcelor board of directors believes that this offer is still inadequate as it continues to undervalue Arcelor," the board said.
It said Mittal's offer did not take into "proper account Arcelor's operating and financial results for last year -- which exceeded market expectations -- and for the first quarter of this year, nor Arcelor's strategic plan."
"The multiple implied by Mittal Steel's valuation of Arcelor remains significantly lower than multiples used in recent transactions in the steel sector," it added.
Arcelor has fought since late January against the offer by Mittal, the biggest steelmaker worldwide in terms of volume, which became official on May 18.
On May 26, Arcelor announced plans to acquire the Russian steel group Severstal for US$15.3 billion in what analysts said was a bid to thwart Mittal's takeover ambitions.
The Arcelor board, which met in Luxembourg on Sunday, said in the statement that "the Severstal transaction is a more attractive alternative from a strategic, financial and social point of view."
It said it "recommends to Arcelor's shareholders to support the Severstal transaction at the general meeting scheduled for 30 June 2006."
"The Severstal transaction will create the world's steel champion and the most profitable steel company," the statement said.
"The Severstal transaction represents a key step in the implementation of Arcelor's value plan and growth strategy and it is consistent with its strategic vision, business model and corporate values," it said.
Mittal's offer, on the contrary, conflicted with Arcelor's growth strategy.
"Mittal Steel's strategy is mainly volume driven while Arcelor's is margin driven," the Arcelor board said.
"As a result of these diverging business models, the synergies generated by the proposed combination of Mittal Steel and Arcelor are on the low side compared to those generated by recent large steel sector mergers and compared to those generated by the proposed merger of Arcelor and Severstal," the board said.
A magnitude 7.8 earthquake struck off the southern coast of Mindanao in the Philippines at 7:38am today, prompting the US Tsunami Warning System to issue an alert for neighboring countries, including Taiwan. The system issued a purple alert indicating a "tsunami threat." The potential threat zone includes Taiwan, the Philippines, Papua New Guinea, Yap and Palau. Philippine authorities were assessing the damage from the quake, with the office of civil defense seeking to verifying initial reports that 15 people had been killed and 129 injured in the region, mostly from falling debris. Arlene Hollero, disaster chief of Maasim town in the Philippines' Sarangani Province,
‘GRAY ZONE’ PRESSURE: Beijing’s activities are intended to create the deceitful impression that China has jurisdiction over the area around Taiwan, the CGA said Taiwan’s rights over its territorial waters and exclusive economic zone must not be violated by any country, the Mainland Affairs Council said yesterday, adding that it will not accept any unprovoked actions. The council issued the remarks in response to the China Coast Guard conducting maritime enforcement drills near eastern Taiwan and claiming to fully exercise China’s maritime administrative law enforcement authority. The Coast Guard Administration (CGA) has been closely monitoring the situation and is taking concrete steps to defend the nation’s sovereignty and secure its waters, the council said. China has no sovereign rights over the waters off eastern
RESILIENCE: Taiwan plays a key role in semiconductors, energy, information infrastructure and advanced manufacturing, AIT Director Raymond Greene said Taiwan’s continued investment in deterrence and resilience remains vital, especially in uncrewed systems and other emerging technologies, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday. Greene made the remarks at the annual National Strategic Summit on Supply Chain Resilience held by the Research Institute for Democracy, Society and Emerging Technology (DSET), a government-backed think tank. As Taiwan last year became the US’ fourth-largest trading partner and supply chain security is becoming more important, cooperation in emerging technologies continues to deepen between the two countries, he said. The US is committed to accelerating innovation, building key infrastructure, strengthening cooperation
The National Chungshan Institute of Science and Technology yesterday showcased its locally developed variants of the Vision 60 robotic patrol dog, which it plans to deploy on the nation’s outlying territories in the South China Sea. The variants were produced under the Joint Lab project — created by the institute and domestic companies — and assembled with domestically produced motors, lenses and artificial intelligence (AI) systems alongside licensed tech from the US, Missile and Rocket Systems Research Division deputy director Jen Kuo-kang (任國光) told the media event at a military base in Taipei’s Dazhi (大直) area. Taiwan has built up its strengths
RSS