Hedge Fund Calls Mittal ‘Prejudiced’

Oct 31 2007 | 7:31am ET

Monaco hedge fund SRM Advisers isn’t especially happy with the final terms of the Arcelor and Mittal merger. So it wants those likely to be happiest with it to respectfully butt out.

In a letter to Lakshmi Mittal, the CEO of ArcelorMittal, now the largest steel company in the world, SRM called the terms offered to the remaining Arcelor shareholders “materially less favorable that originally offered to all shareholders last year,” and accused Mittal of being “unfairly prejudiced” toward those Arcelor shareholders. Under the original merger deal, Arcelor shareholders received 11 ArcelorMittal shares for every seven Arcelor shares. But after 94% of Arcelor investors had tendered their shares, ArcelorMittal reduced the offer to eight shares per seven. Most of the few remaining Arcelor shares—still trading on Euronext Paris—were snapped up by hedge funds.

“Given the above facts,” SRM wrote, “we request on behalf of the Arcelor minority shareholders that ArcelorMittal abstain from any vote to approve the 8/7 ratio at the Arcelor Extraordinary General Meeting” next week. Deferring to the “majority of the minority” would “allow the minority Arcelor shareholders to decide themselves on the merger ratio.”

ArcelorMittal called SRM’s complaints unjustified, arguing the 8/7 ration “is equitable to both Arcelor minorities and ArcelorMittal shareholders.”


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.