Mittal Steel prolongs exchange for Arcelor securities, modifies offer

By Jennifer Chiou

New York, June 29 - Mittal Steel Co. NV said it extended its exchange offer for the shares and convertible bonds due 2017 of Arcelor SA to midnight ET on July 13.

The U.S. offer and withdrawal rights were previously set to expire at midnight ET on July 5. It began on June 7.

The Rotterdam, Netherlands-based steelmaker also amended its offer to exchange Arcelor's American Depositary Shares, each representing one Arcelor common share.

Mittal said it will now exchange 13 Mittal Steel class A common shares and €188.42 in cash for every 12 convertible bonds - Arcelor's OCEANEs - tendered and 13 Mittal Steel class A common shares and €150.60 in cash for every 12 Arcelor Shares or ADS tendered.

Previously it was offering one of its class A common shares and €12.92 in cash for each Arcelor convertible and one Mittal class A share and €10.05 in cash for each Arcelor share or ADS tendered.

Alternatively, Arcelor shareholders may participate in one or both of two secondary capped offers, one for cash only and the other for Mittal class A common shares only.

In those cases, Mittal Steel is now offering to exchange €40.40 in cash for each Arcelor share or ADS, instead of €36.69 in cash for each Arcelor share, or 11 Mittal Steel class A shares for every seven Arcelor shares, instead of 1.3773 Mittal class A common shares for each Arcelor share.

The company added that tenders in the secondary offers are subject to a pro-ration and allocation procedure that will ensure that the portion of the tendered Arcelor shares that are exchanged for Mittal Steel shares and the portion of the tendered Arcelor shares that are exchanged for cash will now be 68.9% and 31.1%, modified from 72.6% and 27.4%, respectively.

Mittal Steel added it started on May 18 exchange offers for Arcelor securities in Belgium, France and Luxembourg and on May 24 in Spain.

The offers are conditioned upon tenders from a majority of the total share capital and voting rights of Arcelor on a fully diluted basis in the U.S. offer and the European offers.

Goldman, Sachs & Co., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and SG Americas Securities, LLC are acting as dealer managers for the U.S. offer. D.F. King & Co., Inc. is the information agent.

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