A day after formally launching its bid, Mittal Steel said on Friday that it was prepared to offer 57% more cash and allow the Mittal family's stake in the combined business to fall below 50% - addressing two sticking points in its earlier bid.
   
Arcelor, the world's biggest steel company by sales revenue, said it would not comment on the revised offer before it had held a board meeting in coming days.
   
Dutch-registered Mittal, 87%-owned by the family of Lakshmi Mittal, the world's fifth-richest man according to Forbes magazine, is aiming to create a 100-million-tonne producer, more than three times the size of its closest rival.
   
But its ambitions have been fiercely resisted by Luxembourg-based Arcelor, and have also sparked a political storm, with some European politicians fearing job losses.

New offer
   
Mittal Steel said in a statement that it was now offering a choice between one new share and 11.10 euros in cash for each Arcelor share, 17 Mittal Steel shares for every 12 Arcelor shares, or 37.74 euros in cash for each Arcelor share.

"Not only are we offering a very significant increase in the cash component, but also a greater participation in the combined company"

Lakshmi Mittal,
chairman and chief executive of Mittal Steel

Previously, the main offer from Mittal Steel was 0.8 Mittal Steel shares and 7.05 euros per Arcelor share.
   
At 1005 GMT, Arcelor shares were up 12.3% at 35.92 euros, having returned from suspension, and Mittal Steel shares in Amsterdam were down 2.8% at 26.79 euros.
  
Using these prices, Mittal Steel's offer is worth about 24.4 billion euros, before taking into account Arcelor's outstanding convertible bonds.
   
Mittal Steel said the maximum amount of cash it was offering was now 7.6 billion euros, up 57% from its previous bid.
   
The new terms mean that the Mittal family's shareholding in the enlarged company would fall to 45%.
   
"Not only are we offering a very significant increase in the cash component, but also a greater participation in the combined company," Lakshmi Mittal, chairman and chief executive of Mittal Steel, said.` 

Arcelor is world's biggest steel 
company by sales revenue


   
"The revision reflects our long-term confidence in the health and prospects of the steel industry, in which the Arcelor/Mittal combination would be the undisputed sector leader."

Serious bid
   
Gerard Augustin-Normand, head of fund management firm Richelieu Finance, said: "It is a serious offer and Arcelor, if it is going to reject it, will have to make clear why. Mittal now has a serious chance of winning, but much depends on the evolution of the Mittal share price."

If successful, Mittal Steel would become a global giant worth around $40 billion, employing 320,000 people and producing about 10% of the world's steel.

Mittal Steel first announced its offer for Arcelor on January 27 but had to wait for regulatory clearance for the bid from watchdogs in Belgium, France and Luxembourg before posting its offer document this week.
   
The offer is open until June 29. Regulators have said the result would be announced on July 13.