Arcelor plans to talk with Mittal Steel on hostile bid

Arcelor has already agreed to acquire the Russian steel company Severstal for 13 billion euros ($16.7 billion) to repel the Mittal bid. Arcelor said Wednesday that it had not changed course. But the decision to meet with Mittal, which has been trying for five months to get Arcelor management to the negotiating table, may reflect an acknowledgment that there are growing concerns about Arcelor’s corporate governance.

Shareholders and analysts have criticised the deal with Severstal, saying a deal with Mittal, which is based in the Netherlands, would make more sense.

Mittal offered 23 billion euros for Arcelor in January and recently raised its bid to 25.8 billion euros ($33.2 billion). Shareholders have called for a special meeting to force Arcelor to put the deal to a meaningful investor vote. In addition, Institutional Shareholder Services, which advises institutional investors on corporate governance matters, is urging them to vote against a share buyback plan at a June 21 meeting. The plan is integral to completing the Severstal deal.

Arcelor, which is based in Luxembourg and has operations in France and Belgium has said that it was reviewing a business plan submitted by Mittal. Arcelor said that it had ‘‘identified a number of questions’’ related to the plan and was seeking a meeting to discuss them. The meeting will take place in the ‘‘coming days,’’ Arcelor said.

Arcelor had refused in the past to meet with Mittal unless the company submitted a business plan for a deal. After balking, Mittal submitted its plan last week. Despite the meeting between Arcelor and Mittal, Severstal’s chief executive, Aleksei Mordashov, hasd said that he planned to complete his deal. It is his ‘‘firm intention to keep all of the shares of Arcelor stock in this transaction, regardless of whether Mittal winds up with a minority stake,’’ said Robert Miller, managing director of the investment bank Miller Mathis, who is acting for Mordashov. Mittal took its offer to Arcelor shareholders in Europe last month, and they have until July 5 to consider it. As a result, Mittal could end up with a minority stake in Arcelor. Mordashov is expected to wind up with a 38 per cent stake in Arcelor after the Severstal deal is done.

The deal has received ‘‘overwhelmingly positive feedback from a variety of long-term Arcelor shareholders,’’ Miller said, and the criticisms ‘‘reflect a vocal minority’’. Mittal is keeping up the pressure on Arcelor in France, where it ran full-page ads in daily papers showing cartoons of blindfolded Arcelor shareholders, with a headline saying ‘‘You have a right to complete information’’. Fran‡ois Loos, the French industry minister, expressed his support for the Severstal deal on Wednesday, calling it an ‘‘amicable project,’’ in contrast to Mittal’s hostile bid. But he added that it was up to shareholders to decide which deal was best. Mittal officially began its offer for Arcelor in the US on Wednesday, where the company’s American depository shares trade on the New York Stock Exchange.