Mittal Steel gets tenders for 92% of Arcelor convertibles

By Jennifer Chiou

New York, July 26 - Mittal Steel Co. NV said holders of 19,858,533 Arcelor SA convertible bonds due 2017 and 594,549,753 Arcelor shares tendered their holdings.

The U.S. offer and withdrawal rights ended at midnight ET on July 13. They were extended on June 30 after being previously set to expire at midnight ET on July 5. The exchange began on June 7.

The shares represent 91.88% of the fully diluted share capital of Arcelor and 91.97% of its voting rights.

By comparison, at the close on July 11, holders of 1,500,655 Arcelor convertibles and 87,468,297 shares had tendered their securities, making up 14.11% of the voting rights of Arcelor.

As revised, Mittal was offering 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.

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

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 company added that there will be another offering period with the same terms for the four countries and the United States from July 27 to Aug. 17.

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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