Arcelor to open book on Severstal deal

Shareholders in Luxembourg-based Arcelor, the giant European steel group, have succeeded in persuading the company to disclose detailed valuation reports of assets owned by Severstal, the Russian steel group that it has agreed to acquire in a euro 13 billion deal.

The documentation will be disclosed in the next two weeks after mounting fears that Arcelor overpaid for its Russian rival as a last-ditch attempt to ward off a hostile takeover bid by Mittal Steel, owned by NRI steel tycoon Lakshmi Mittal.

The valuation reports will concentrate on Severstal's mining assets in Russia.

According a report in The Sunday Telegraph today, investors holding over 30% of Arcelor's shares are opposing the Severstal deal.

The group of investors, which last week sent a letter to the Arcelor board demanding an extraordinary general meeting to discuss the procedures being used to approve the Severstal takeover, have threatened legal action against individual directors of Arcelor if their concerns were not addressed.

Opponents of the Severstal deal have to secure the support of 50% of Arcelor's total shareholder base if they are to successfully block the takeover.

One signatory of the Arcelor letter told the newspaper: "The prospect of legal action is not an idle threat. We mean business." Nearly all the shareholders who signed the letter are hedge funds. Only Santander, the Spanish bank which owns Abbey National, has so far pledged its support to the Arcelor-Severstal tie-up, the report said.