Prices at the factory gate also rose, with that index rising for the 10th straight month in May to 53.7 from 52.0.Factories were supported by strong growth in the eurozone, which underpinned an acceleration in volumes of fresh export orders, especially from Germany. It eased to 53.2 from 54.0 on a scale where 50 separates expansion from contraction, only its second fall this year.
It contrasted with the eurozone economies, where growth in its manufacturing sector rose to its strongest in almost six years.Cips said the slight slowdown masked the fact that UK manufacturers had posted their 12th successive month of growth.Roy Ayliffe, a director of Cips, said: “The unrelenting recovery being experienced by the sector is bolstering manufacturers’ outlook about the future with levels of confidence hitting another high.”Despite the slowdown in activity, analysts said a surge in input and output prices would keep the Bank of England’s interest rate committee on alert.Rising energy and raw materials costs sent the index of raw materials costs to 67.4. The headline activity index produced by the Chartered Institute of Purchasing and Supply (Cips) fell in May from April’s 117-month high. The strong rebound in growth at Britain’s factories hit a bump last month as output and new orders both slowed, a snapshot survey showed yesterday. The rebels plan to see off this tactic by voting for a postponement on 28 June.Yesterday Mr Doll?nd Alexey Mordashov, the Russian tycoon who controls Severstal, hit out at the critics of the Arcelor board.Mr Mordashov said shareholders could speak against the Severstal deal at the 28 June meeting or sell their shares to Mittal if they were unhappy with the Severstal transaction.He also criticised hedge funds which had attacked Mr Doll?saying groups that controlled a small slice of the group did not have the right to block a deal if others backed it.”I doubt they are very much interested in the long-term destiny of this company.”. The indications were that the Arcelor board would allow this EGM to be held but only after the 28 June meeting on the Severstal deal, rendering the exercise largely academic. Half the entire share capital of Arcelor must be voted against the transaction to block it – considered by many to be a virtual impossibility.Arcelor yesterday said it will consider the contents of the letter but it does not have to accede to the demand for 30 days.
But, if 20 per cent of shareholders club together, they can pursue a lawsuit.At the top of the legal targets will be the Arcelor chairman, Joseph Kinsch, and its chief executive, Guy Doll?The lawsuits would go after the personal wealth of directors, not company money.The rebels regard the Severstal deal as a way of scuppering a hostile takeover bid for Arcelor from Mittal.Earlier this week, the shareholders sent a letter to the Arcelor board, demanding an extraordinary general meeting over the procedure being employed to approve the Severstal deal. Among their complaints is that the Arcelor board has not properly considered a takeover offer for the company by its rival Mittal Steel.One source said: “They [the directors] have been completely dismissive of the views of shareholders but I’d like to see how they feel when a huge army of American lawyers descends on their homes to serve them with writs.”Under the laws of Luxembourg, where Arcelor is based, it is very difficult for individual shareholders to sue board directors. Rebel shareholders in Arcelor plan to sue individual members of the steel group’s board if it continues to effectively ignore their resistance to a merger with the Russian group Severstal. The rebels believe they can force Arcelor to postpone a meeting called by the company to approve the controversial £8.9bn takeover of Severstal.
At a 28 June meeting they will vote for the event to be rescheduled; they need only 20 per cent support to postpone it and already they have gathered 30 per cent of the shareholder base in a rebel grouping being co-ordinated by the investment bank Goldman Sachs.The shareholders, who include US fund managers, are so concerned about what they regard as the undemocratic and cavalier attitude of the Arcelor board they are now in talks with lawyers over taking the issue to the courts.They are consulting lawyers over suing the directors for breach of fiduciary duty.
He added that Aviva was not wedded to any particular region for expansion. Last year, the group made an offer for the US insurer AmerUS. Aviva’s chief executive, Richard Harvey, is known still to be keen to grow the business on the other side of the Atlantic.Commenting on Standard Life’s decision to float on the London market, Mr Scott said Aviva had always preferred the idea of having one of its main competitors subject to the disclosure and transparency requirements of a quoted company.. A figure under 100 per cent represents an underwriting profit.Mr Scott said the group had not ruled out making a larger acquisition and said the company was keeping a “watchful eye” on the market.
“Secondly, we believe we can achieve further life growth through future joint ventures and distribution deals, funded from our internal capital generating abilities.”Finally, we also want to continue to grow our international general insurance business, but in a way which ensures we meet our combined operating ratio of 98 per cent.”The combined ratio is a key measure of a general insurer’s profitability. Aviva has never set itself specific public growth targets before.Mr Scott said there were three key elements to yesterday’s announcement. “First, we’re going to aim to grow our international life business by at least 10 per cent a year over the next five years – both at a premium level and new business profits,” he said. However, analysts suggested setting such bold targets was part of its plan to win back City sentiment. After it withdrew its offer just a week after it was made public, analysts and investors suggested that Aviva had left itself open to a bid.Philip Scott, the group’s executive director responsible for the international division, said the investor day had been planned before the company’s pursuit of Prudential was made public. Speaking to analysts and investors in London, the group unveiled plans to grow its international sales and profits organically by 10 per cent a year for the next five years, while making a more concerted effort to hunt down suitable bolt-on acquisitions which enhance its distribution network.
Although there were no specific details of its strategy for the UK, the group said it planned to set itself equally tough targets in its home market later this year, once its new UK management team had settled down.The announcement comes two months after Aviva’s reputation was bruised by its failed takeover bid for Prudential.
The insurance giant Aviva, which owns the Norwich Union brand, launched a charm offensive on the City yesterday, setting itself demanding growth targets for its international business, to try to restore credibility after its failed pursuit of its rival Prudential earlier this year. Corus fits that profile and has attracted Russian investors, notably Alisher Usmanov who tried and failed to get a seat on the board, and the aluminium tycoon Oleg Deripaska.Mr Abramovich is on good terms with both men and is known to have been in business talks with Mr Usmanov in the last month.Corus shares closed up 7.25p at 398p, valuing the company at £3.6bn.. It was already sitting on serious cash reserves from the sale of a 50 per cent stake in Rusal, Russia’s biggest aluminium producer.It has been widely speculated that Mr Abramovich was keen to exit the Russian business world due to excessive political risk and sink some of his billions into more stable Western enterprises. Millhouse, the billionaire’s investment vehicle, made £7bn last year when it sold its controlling stake in the oil company Sibneft to the Kremlin-controlled Gazprom.
