Arcelor's board had unanimously rejected Mittal's €22-billion offer at its meeting in Luxembourg..(See: Arcelor rejects revised Mittal bid; to negotiate for higher bid).

Mittal Steel had said earlier in the day that it had not made any proposal to improve the financial terms of the offer and has no intention to do so any further. It was responding to speculation that it would be forced to improve its offer yet again after Arcelor's rejection.

Mittal said in a statement that its offer was "very compelling" and termed the €44 per share valuation under the Severstal agreement "entirely fictitious".

Mittal added that any indication of a willingness to improve its bid had been in terms of better corporate governance and not price.

Mittal Steel's last offer, made on 19 May 2006, values Arcelor at €37.74 per share based on Mittal Steel's May 18 share price - a premium of 34 per cent over the last offer and 70 per cent over the first offer on January 26, 2006, based on the previous day's closing when Mittal announced its take-over intentions on January 27. The 19 May offer raises Arcelor's equity value to €25.8 billion ($32.9 billion).

Mittal Steel had given Arcelor's shareholders three options in a "mix and match" offer:

• They could choose between one Mittal Steel share and €11.10 euros ($14.16) in cash for each Arcelor share they own
• Or 17 Mittal Steel shares for every 12 Arcelor shares
• Or €37.74 ($48.15) in cash for each Arcelor share

The Arcelor board has turned down this revised takeover offer as being "inadequate" and undervaluing the company. The board also urged shareholders to back its merger with Russian firm Severstal, which it had proposed as move to thwart Mittal's bid.

The board called the €13 billion plan to buy Severstal "a more attractive alternative from a strategic, financial and social point of view" and recommended that Arcelor's shareholders support the move at a general meeting scheduled for 30 June.

Mittal's merchant bankers, Goldman Sachs has mobilised approximately 30 per cent shareholders who state that they prefer the merger with Mittal to Severstal. However, Arcelor says it will not call a new shareholders meeting that would allow the Severstal deal to be blocked.

Arcelor said that it would meet with Mittal "to review Mittal's proposals to further improve its offer".