Steel group Arcelor has to convince investors why it made a €13 billion deal with Russia's Severstal instead of talking to suitor Mittal Steel, analysts said today.
On Friday, Arcelor agreed to buy Severstal to create the world's biggest steelmaker.
Colette Neuville, president of French small shareholders lobby ADAM, which represents about 5 per cent of Arcelor holders, said today she was writing to Arcelor chairman Joseph Kinsch and the Luxembourg regulator to get procedural clarification.
She said either Severstal makes an offer for all Arcelor shares or the two companies start a proper merger procedure with an independent valuation of assets and a shareholders meeting to vote on the deal.
Arcelor shares rose 1.65 per cent to €32.10 this morning, recouping part of Friday's loss, and Mittal's raised cash and share offer values it at €36.47. Analysts said the Severstal deal had its merits but was not necessarily better than Mittal's offer.
Arcelor, now the second-largest steelmaker behind Mittal in volume, said on Friday that the enlarged group would be the industry's most profitable, with 40 per cent of its core earnings in the lucrative Brazilian and Russian markets.
The deal is expected to be put to Arcelor shareholders at a meeting provisionally on June 28th. To reject the deal, a majority of shareholders would have to vote against it.