HENCEFORTH, let it be known as Thierry’s law — all bids must be conducted in the French language with proper attention to correct pronunciation and flawless grammar.

Unfortunately, no one told Lakshmi Mittal, an itinerant Asian metal merchant who arrived in Paris, eager to promote his brilliant idea of merging Mittal Steel with Arcelor.

Sadly, his ignorance of French culture and its civilising mission in the world has been cruelly exposed. (Could it be that the chairman of Mittal Steel has never yet been sneered at by a French waiter?) Thierry Breton, the French Finance Minister, had his work cut out, gently explaining to the bumptious chairman of Mittal Steel that in matters of public takeovers in France, there is a proper “grammar” and a polite way of doing things.

“La grammaire des affaires n’a pas été respectée,” declared M Breton. Could it be, the Finance Minister asked, that Mr Mittal had ignored the advice of his investment bankers or was he badly advised? Happily, M Breton is able to educate the uncouth Mr Mittal and steer an errant pupil back on the right path with his quick refresher course in the conjugation of verbs in the subjunctive. The basic rule is as follows: should you wish to bid for a French company, you must first consult Thierry Breton.

Curiously, the rules of French grammar have changed recently. Only last summer, M Breton was at pains to distance himself from an uproar over a rumoured bid by PepsiCo for Danone, the French yoghurt and biscuit manufacturer. It was a phantasm of a bid (PepsiCo never uttered a word) and the minister called “time” on the protesters, declaring that the nationality of a bidder did not matter. What counted, he said, was where they intended to invest.

PepsiCo’s mastery of irregular verbs seems to have won over the Finance Minister, or perhaps the absence of a bid makes policy easier. Whatever the reason, M Breton this week told Mittal Steel, a Dutch- registered company with headquarters in London, that its fate could resemble that of CNOOC, the Chinese oil company that was hounded out of Washington, chased by flag-waving senators enraged by its pitch for Unocal.

Yet what really rankles in the Rue de Bercy, home of the mandarins of the French economy, is that they were ignored. What pleasure is being a civil servant if you cannot meddle, tinker, write position papers and otherwise distract and delay people going about their business? Mr Mittal’s error was to assume that investors should be told first. In France, the State hears first and speaks last.

A quick glance at recent history tells the tale. You might be forgiven for thinking that M Breton’s lesson in grammar was a reaction to the hostile nature of the Mittal bid.

You would be mistaken, because France is not averse to hostile offers, under certain conditions. First, the bidder is best when French. Consider the offer by Sanofi for Aventis and consider France’s biggest hostile bid battle — the takeover of Elf Aquitaine by Total. It was hard fought, but it also satisfied the second condition of hostile bids, in that the State was consulted, apparently in advance on an aircraft when Total’s chief laid out his plans to Lionel Jospin, then Prime Minister, securing his blessing.

Refilling Repsol’s depleted tank

IN BARCELONA, Antonio Brufau will be watching with interest the political shenanigans over Arcelor. The chairman of Repsol YPF has not yet received a bid, but the Spanish oil company may not have to wait long. Last week Señor Brufau relegated a quarter of Repsol’s oil and gas reserves as “unproven” and investment analysts promptly wrote off its prospects.

The Repsol chief is only a year in the job and not to blame for some over-optimistic reserve booking by former management. Meanwhile, the new regime in Bolivia is not helping; Repsol has a big position in Bolivian gas, but a huge tax rise and threats of nationalisation by Evo Morales, the Bolivian President, have rendered slim the prospect of profitable gas exports.

How is Repsol to fill its depleted tank? It is over-exposed to Latin America, not just Bolivia but also Venezuela, another area of political and fiscal risk. It has little or no position in the oil and gas provinces of West Africa, Russia or the Middle East and it cannot afford to outbid aggressive Chinese oil companies that are chasing every whiff of crude.

A bid makes sense, perhaps from ENI, the Italian oil major. Madrid will claim Repsol, with its third share in Gas Natural, to be a strategic national asset. You know the rest of the story.

carl.mortished@thetimes.co.uk

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