Monday, February 20 2006 10:49 Hrs (IST) - World Time -

New York: A US shareholder in European steel producer Arcelor has called on the firm to open talks with Mittal, the rival maker that has made a hostile takeover bid.

Atticus Capital, an investment firm which has a 1.3 per cent stake in Arcelor, yesterday said it had written to the Luxembourg-based firm expressing disappointment at the board's rejection of the offer and calling for the talks.

"We were very disappointed by the board's initial reaction to the tender offer made by Mittal Steel on January 27 and by your continued refusal to meet with them to discuss their offer for our company," he said.

Mittal, which is registered in the Netherlands, launched a US$ 22.3-billion hostile bid for Arcelor in January.

Arcelor has rejected the bid and enlisted the help of European governments to fight the takeover.

"We believe in the compelling industrial and financial merits of the transaction, which would offer synergies and strategic benefits to all participants in an industry in need of consolidation," said Atticus chief Timothy Barakett in the letter.

"For these reasons, we believe that a transaction with Mittal Steel would be in the best interests of Arcelor shareholders and stakeholders.

"We urge you to objectively consider the merits of a transaction with Mittal Steel and to engage in negotiations in order to maximize their offer, which stakeholders should then be able to judge on its merits.

"A recommended deal would be of value to all parties and could surely lead to an improved offer," he said.

Atticus said it also has a 0.5 per cent stake in Mittal Steel among its US$ 10 billion portfolio.