Mittal Steel Co. said Friday it was in advanced talks with Arcelor SA that could see the takeover target drop its opposition to Mittal's 25.8 billion euro ($33 billion) offer.
"We can confirm that we are in advanced and constructive discussions with Arcelor which may or may not lead to a recommended transaction," Mittal said in a statement. "We remain committed to enhancing value for our shareholders."
Arcelor's board meets Sunday to weigh up both Mittal's offer — which it has fought off since January — and a plan to merge with Russian partner OAO Severstal that, combined with a share buyback, was viewed as a defense against Mittal.
Trading in Arcelor shares was suspended Wednesday after French, Belgian, Spanish and Luxembourg market regulators asked for "firm and final" information for shareholders on both the Mittal and Severstal bids. They said shares should trade again by Monday at the latest.
Shareholders are due to meet June 30 to vote on both the Mittal and Severstal offers amid criticism of the way the Severstal deal is structured.
Pressure from key equity holders forced Arcelor on Monday to postpone plans to buy back 6.5 billion euros ($8.2 billion) of its own shares that — linked with the Severstal deal — would have changed the way the company is owned.
Severstal's controlling shareholder Alexei Mordashov originally planned to buy a 32 percent stake that the share buyback would increase to 38 percent without him lifting a finger, skirting a Luxembourg rule that would force him to make a mandatory offer if his holding went past a 33 percent threshold.
Mordashov backed off Tuesday, saying he would buy 25 percent and ask for less control of the steelmaker.
Shareholders have also criticized the unusual way the agreement is to be approved. More than half of all shareholders must oppose the deal to stop it; otherwise it will go through. Proxy voting adviser Institutional Shareholder Services said it is recommending Arcelor holders vote against the deal.
A French shareholder activist said a Luxembourg court would rule June 29 on its request to postpone the shareholders' meeting, saying more time was needed to decide between both deals. Colette Neuville, the president of Association for the Defense of Minority Shareholders, told Dow Jones Newswires that she had pleaded her case at a hearing on Thursday.