Dutch court rejects bid to block Mittal-Arcelor merger UPDATE

Paris - 28 August 2007

The civil court in Rotterdam has rejected a case brought by three activist hedge funds seeking to block the continuing merger between steel giants Arcelor and Mittal, legal sources told Agence France-Presse.

The presiding judge rejected the request to cancel the second phase of the merger, saying: 'It is not possible to conclude in advance whether the petitioning parties will be disadvantaged as a result of the merger.'

However, he added that the funds in question still have the option of bringing their case before the Luxembourg courts.

The judge also specified that: 'The ruling in no way addresses the substance of the case: the exchange parity proposed.'

The three activist funds -- Global Master Fund Ltd, Trafalgar Catalyst Fund and Trafalgar Entropy Fund -- filed their case with the Rotterdam civil court on Aug 22, protesting the new share exchange parity proposed by ArcelorMittal for remaining Arcelor minority shareholders.

ArcelorMittal is currently offering 8 ArcelorMittal shares for every 7 shares in the former Arcelor group, which minority shareholders deem is less favourable than the 11 ArcelorMittal shares originally offered for every 7 Arcelor Shares.

The three funds, which together hold 1 pct of Arcelor's capital, estimate their total losses under the existing offer at 152 mln eur.

In June this year, ArcelorMittal rejected criticism of its revised share exchange parity saying the offer was fair and had been calculated in accordance with the merger memorandum of understanding of June 25, 2006.

The lawyer representing the three hedge funds at the Rotterdam court, Jurjen Lemstra from law office Pels Rijcken, declined to comment on whether an appeal will be lodged.

All involved parties have two weeks with which to lodge an appeal.

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