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Celtic urges shareholders to refuse Severstal bid

Celtic Resources Holdings PLC’s shareholders were asked by the company to reject a takeover offer from Russian steelmaker JSC Severstal.

Severstal approached the Celtic's board on Sept. 5 with an offer of 220 pence (EUR3.16; US$4.48) a share, which Celtic rejected. Later in the month, Severstal raised its offer to 270 pence (EUR3.88; US$5.50) a share, an offer it said valued the company at about 161 million pounds (EUR231 million; US$328 million).

"Severstal's proposed offer of 270 pence (EUR3.88; US$5.50) a share fails to recognize the company's excellent position, planned growth in production against a background of a high and rising gold price," Celtic said in a statement. "Severstal is trying to buy Celtic cheaply."

Severstal has said its offer provides "excellent value" for Celtic shareholders.

Shares of Celtic Resources dipped 0.7 percent to 277 pence (EUR3.98; US$5.64) in London.