BRUSSELS, Belgium | Shareholders of steel giant Arcelor SA are seeking a Dutch court order to stop the Mittal Steel Co. NV takeover that offers them a share swap they are not happy with, Arcelor said Thursday.

The company, which is already calling itself ArcelorMittal, said it had received a writ of summons from the SRM Global Master Fund Ltd. Partnership, Trafalgar Catalyst Fund and Trafalgar Entropy Fund to appear Aug. 22 before a court in Rotterdam, the Dutch city where Mittal is headquartered.

The hedge fund investors represent half of the remaining minority shareholders and hold around 3 percent of the company's capital.

They are unhappy that the second phase of the ArcelorMittal merger will be governed by Luxembourg law -- instead of Dutch law -- alleging that this allows the company squeeze them out with a lower offer. Dutch law would force Mittal to control 95 percent of Arcelor capital before it could launch a mandatory buyout.

Mittal currently has 94 percent.

ArcelorMittal said it believed there were no grounds to the shareholders' claims.

Joseph Kinsch, the company's chairman, said in April that shareholders were wrong to fear that a new offer would be lower, saying Mittal had offered an excellent price.

He also criticized the rebels as speculators who had bought into the company during the hostile-turned friendly takeover battle last year.

Hedge fund activists say this should not matter as all shareholders should be treated the same and all sought to increase the value of the company.

In May, Arcelor had offered to buy out the stragglers at a lower share exchange than offered last summer. Arcelor's board said three investment banks had agreed that this was fair and it would be checked with independent auditors.

But some of the shareholders threatened legal action at that stage, saying the new offer should be higher because the original did not take into account the brighter prospects for the steel industry and a court ruling that the company could keep its newly purchased Canadian steelmaker Dofasco Inc.

Arcelor said the writ of summons sought an injunction to block the first phase of the merger when Mittal combines with ArcelorMittal SA. Mittal had planned to seek shareholder approval for this on Aug. 28 and complete this step on Sept. 3. ArcelorMittal would then merge with Luxembourg-based Arcelor at a later date.

This is just the latest speed bump for the creation of the world's largest steelmaker that will control around 10 percent of global steel production.

Brazilian regulators forced Mittal to make a higher offer for Arcelor SA's Latin American steel units that adds nearly 4 billion euros ($5.43 billion) to the cost of the deal -- estimated at around 30 billion euros ($41 billion). The companies also had to sell plants in Europe and the U.S. to win regulatory approval.