See letter to the Editor of the Financial Times published today:
Sir, As it is showing from its frequent announcements ("A kiss could win hearts at Arcelor", April 5), Arcelor continues to follow the step-by-step approach taken straight out of "Defending against a Takeover 101" in its battle against the Mittal offer.
More or less in this order, the handbook requires you to ensure your government is onside and, whatever you do, do not forget to use the words "national champion". Second, announce that the resulting merger will cause significant job losses, which will bring the unions on board.
Third is where you suddenly get a hankering after free competition and become anti-monopoly, so you need to pronounce that the merger would result in a monopolistic behemoth which will not be good for competition.
Fourth, you announce that the shareholders making noises against you and in favour of the bid are not true shareholders but financial manipulators who are only looking for a quick profit. If possible, try to use the word locusts as well.
Fifth, you announce unexpectedly strong results including, if you need to, bringing forward the date of announcement, accompanied by a significant increase in the projections for future profits. Don't worry that it may look suspicious that suddenly things are looking much rosier than when you had to announce profits and projections and you were then held to them. This is no time for the lighthearted, your survival is at risk, and the market will be delighted because they will hope for a higher price than expected.
Sixth, announce a large increase in dividend payments. Seventh, announce a large share repurchase programme going forward. I know it hurts but, again, this no time for the timid and, I hesitate to say it, we all know that it is their money after all, although we have usually done a good job in ensuring that they forget it.
And remember never, never leave it to your shareholders to decide. Just because they own your company does not mean that they know their company well enough to make such an important decision as putting your job at risk, and they certainly do not know their company as well as the management does.
Onésimo Alvarez-Moro
See Letter (paid subscription required).
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