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. Last Updated: 07/27/2016

Lisin Talks Steel in Luxembourg

bloombergReports suggested Novolipetsk steelmaker may be eyeing a stake in Arcelor.
BRUSSELS / MOSCOW -- Luxembourg Economy Minister Jeannot Krecke said on Tuesday that he had discussed steel sector consolidation with billionaire Vladimir Lisin, chairman of steelmaker Novolipetsk, or NLMK.

Luxembourg's Tageblatt reported that Krecke said the Russian businessman might want to buy a stake in Arcelor, which is seeking to fend off a 20 billion euro ($24.3 billion) takeover offer from Mittal Steel.

The Luxembourg state owns 5.6 percent of Arcelor, which is based there, and was once one of the most vocal opponents of the bid by Mittal. It has since said the market should decide the fate of the company.

Krecke, who is leading a Luxembourg business delegation visiting Russia, confirmed that he had met Lisin on Monday, but would give no further details.

A Mittal spokeswoman said: "[Arcelor] shareholders should be concerned that this could be another attempt to deprive them of the right to decide on the merits of Mittal Steel's offer."

An Arcelor spokesman declined to comment, while NLMK said the talks were about an affiliated firm of Arcelor.

"We discussed questions of developing cooperation between NLMK and companies from Luxembourg, in particular [engineering firm] Paul Wurth, with which NLMK already has a partnership agreement," the company said in a statement.

Paul Wurth is 48 percent owned by Arcelor and is chaired by Michel Wurth, who is also deputy CEO of Arcelor. NLMK said Michel Wurth did not take part in the meeting, however.

NLMK issued a five-line statement in response to written questions from Reuters about reports that it might buy a 15 percent stake in Arcelor.

According to a previous Russian media report, Lisin is considering buying a 15 percent stake in Arcelor, which could possibly hinder Mittal's bid.

Lisin, estimated by Forbes magazine to be Russia's third-richest man, with a fortune of $10.7 billion, floated a 7 percent stake in NLMK on the London stock market last December, raising $600 million. His company had net cash of $1.9 billion as of last Sept. 30, putting it in a potentially strong position to snap up a minority stake in Arcelor.

Luxembourg Prime Minister Jean-Claude Juncker, in Strasbourg for a meeting, indicated the Grand Duchy was not rolling out the red carpet for Lisin. Asked if he thought it would be right to sell a stake in Arcelor to NLMK, Juncker said: "That depends on what their industrial policy is."

A French broker in Paris, requesting not to be named, said the Lisin report was worrying. "Arcelor chief executive Guy Dolle has said the company will do nothing that goes against shareholders' interest. But there are some worries that there are perhaps maverick members on the Arcelor board of directors who want to throw up defenses at any cost," the broker added.