Severstal, which generates around half its sales in Russia, has been rapidly expanding internationally.
Goldman Sachs is orchestrating a shareholder campaign to have a conventional vote on the Severstal deal.
Arcelor and Severstal know each other well after launching some joint ventures in Russia.
Alexey Mordashov, the 46-year-old billionaire chief executive of Moscow-based Severstal, is a big believer in Detroit.
Chief executive and controlling shareholder of steelmaker Severstal, which has seen its stock plummet 84% since last February.
The offer by Severstal is backed by Esmark's largest shareholder, Franklin Mutual Advisers, which controls 60.1% of Esmark's shares.
According to company by-laws they do not have to ask for shareholders' opinion on the Severstal deal at all.
"We continue to invite bidders, including Severstal, to provide a superior proposal to that of Essar, " Chairman JamesBouchardJames Bouchard said.
But Severstal, Russia's number three, last year bought Rouge, an American steelmaker, and is among the suitors for Canada's bankrupt Stelco.
"We continue to invite bidders, including Severstal, to provide a superior proposal to that of Essar, " Chairman James Bouchard said.
They argue that Severstal is a better company than Mittal because it is more efficiently managed, more profitable and invests more.
If the proposed merger between Arcelor and Severstal goes ahead it would create the world's biggest steelmaker with a turnover of 46bn euros.
The Russian steel and mining giant Severstal has linked up with South Africa's Anglo-American to jointly explore Kola deposits of zinc, copper and nickel.
However, Agence France Presse quoted a Severstal spokeswoman as saying that the talks had focused on the sale of a stake in Ren TV.
There are incipient potential oligarchs, such as Alexei Mordashov of Severstal, a steel firm, one of whose former executives is now minister of transport.
"Currently Esmark is an underperforming company and Severstal has a mixed track record for turning companies around, " Troika Dialog analyst Sergey Donskoy told Forbes.com.
Severstal, which lost out earlier this year to Mittal Steel in a battle to aquire Luxembourg-based company Arcelor, is around 90% owned by Mordashov.
Russian steel company Severstal is another hard currency bond we like.
Severstal will begin the roadshow for its London listing on Monday.
The board also decided Severstal's offer was not in the best interests of shareholders and urged them not to sell their shares to the metals-and-mining company.
In a regulatory filing last week Franklin said it had tendered all of its Esmark shares into the Severstal offer because the USW opposed the Essar bid.
The offer mirrored last week's bid by India's Essar Steel Holdings except for one crucial difference: Severstal claims to have the support of the United Steelworkers union.
His 32% stake will increase to 38% after a buy-back of Arcelor shares (decided before the deal with Severstal was concluded), which will shrink the shareholder base.
With Severstal, the company will become bigger and richer, and so will be in a better position to swallow smaller steelmakers in China and other emerging economies.
Severstal maintains it has the support of Esmark's main union.
Some Arcelor shareholders have complained they had little say in the deal with Severstal, which would give the Russian group's majority-owner and chairman, Alexei Mordashov, 32.2% of the enlarged group.
Mittal's offer for Arcelor is competing against an alternative plan unveiled last week by Arcelor in which it plans to buy Russian firm Severstal in an attempt to thwart Mittal's advances.
Two key Russian steel companies, Magnitogorsk Metal Combine and Severstal (owned by billionaire Alexei A Mordashov), have publicly stated they are looking at mines owned by Akhmetov's System Capital Management.
Although theories of a counterbid from Russian company Severstal for Anglo-Dutch steelmaker Corus appear increasingly unlikely, the firm's billionaire owner, Alexei Mordashov, still has ambitious international expansion plans for his business.
Next they proposed to scotch Mittal by merging with Severstal, an opaque metals firm controlled by a Russian tycoon who, without launching a bid, was to become the dominant shareholder of the combined group.
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