Mittal bids 24 bln euros for Arcelor

London: Mittal Steel, seeking to win back eroding investor support for its bid for Arcelor, raised its offer by a third and dropped a key demand for family control over the combined global steel giant.

In a surprise move just a day after the hostile bid was formally launched, Mittal boosted its total value today by 6 billion euros to above 24 billion euros.

Arcelor shares jumped 13 per cent and Mittal's shed 5 per cent when their shares began trading after the new bid was announced.

Arcelor said it would not comment on the new bid before a board meeting planned for Sunday.

Mittal's move came after the value of its cash and share offer fell more than 10 per cent behind the market value of Arcelor, as the Luxembourg-based target announced a buyback of its own shares at above-market prices to ward off Mittal.

Mittal's improved bid valued Arcelor shares at 37.2 euros by (2030 IST) today, catapulting the offer above Arcelor's stock price, which stood at 35.50 euros.

Mittal, 87 per cent owned by the family of Lakshmi Mittal, is aiming to create a producer of 100 million tonnes of steel per year - more than three times the size of its closest rival - by combining the largest and second largest companies in the fragmented steel industry.

But its ambitions have been fiercely resisted by Luxembourg-based Arcelor and have sparked a political storm, with some European politicians fearing job losses.

French Finance Minister Thierry Breton said the government still awaited answers from Mittal on questions about its pledges, while Luxembourg, which has a 5.6 per cent Mittal stake, added it still needed to see the bidder's industrial plan.

Belgium's Walloon region, owner of a 2.3 per cent stake, said its decision on whether to sell would depend on jobs and investment plans and not the financial terms of the offer.

On a telephonic with CNBC, Mittal indicated that there is friendly discussion with Arcelor in best interest of stakeholders, customers and clients.

Arcelor Board will meet on Sunday to discuss Arcelor's new bid.

New offer is the most compelling offer for the shareholders.

Arcelor Board’s decision to be relayed to Mittal Steel within a week and there will not be any retrenchment/layoff arising from the deal.