Mittal Steel, the world’s largest steelmaker, said on Friday that it had got US clearance for its proposed bid for rival Arcelor, as it posted a 35 per cent fall in first-quarter profit.‘‘Our offer for Arcelor is expected to go live shortly,’’ Mittal said in a statement. It said the US justice department was still looking at an ‘‘area of overlap’’ between the two companies’ operations in North America but a remedy had already been agreed should any problem be found.The fall in Mittal Steel’s profits reflected the move in the steel industry’s price and demand cycle, and Mittal Steel head Lakshmi Mittal said that he was pleased with the performance ‘‘despite bottom-cycle market conditions in Africa and Asia’’.‘‘We expect the market recovery to continue in the second and third quarter of 2006, supported by improvements in the Asian market,’’ he said.Rabobank Securities analyst Richard Brakenhoff said: ‘‘The US clearance is good news as the US is by far the most important area for Mittal. We are waiting to hear more news next week when Mittal is expected to open its bid’’.Numis Securities analyst John Meyer said: ‘‘The US clearance is a step forward but the big news is out of Brussels (from Arcelor)’’.Steelmaker Arcelor SA said on Friday that it planned to buy back almost a quarter of its shares, pointing to better-than-expected first quarter results as proof the company is undervalued and was right to fend off a takeover bid from Mittal Steel Co.Arcelor reported a net profit of $968 million for the first quarter on Friday, down nearly 20 per cent from a year earlier as steel prices fell and the cost of oil rose.Arcelor CEO, Guy Dolle, said the results showed that the real value of Arcelor was ‘‘much higher than the (share) price quoted today’’ as the company pressed ahead with plans to spend $6.36 billion buying back up to 24 per cent of its equity. ‘‘Our best defense is our results,’’ he said. ‘‘Obviously the best thing for Arcelor shareholders is Arcelor.I wish to underscore that the Mittal Steel results are very much lower than Arcelor’’.Arcelor said it believed only 15 to 20 per cent of its shares were held by speculative investors — such as hedge funds — and many long-term shareholders were keen to hold on to their stakes.The company came under fire from some minority shareholders at its annual general meeting last month for failing to consult over defensive measures to prevent the resale of Dofasco. Mittal has said it would sell the Canadian company to its previous suitor, Germany’s ThyssenKrupp AG, if its bid for Arcelor is successful.But Mittal is not eyeing Arcelor’s acquisition depending on the money that he would garner from Dofasco’s sale. ‘‘If Mittal Steel is unable to sell Dofasco to ThyssenKrupp due to Arcelor’s transfer of its Dofasco shares to the S3 Stichting, Mittal may instead resolve any competitive concern by selling an alternative asset,’’ Mittal Steel said.
