LONDON, June 12 — The European steel giant Arcelor formally rejected a 25.8 billion euro ($33 billion) hostile takeover bid by Mittal Steel on Monday. But for the first time, Arcelor said it might be willing to negotiate a deal because, it asserted, Mittal's advisers had signaled that their company might raise its offer again.

The move represented a new tone of openness for Arcelor, which so far has refused to meet with Lakshmi N. Mittal, the founder and chief executive of Mittal Steel, or any of his executives since the first bid five months ago.

Leaders from the two companies are expected to meet in the next few days. Bankers representing both parties met face to face at Arcelor's headquarters in Luxembourg last week, but only to address questions about the business plan Mittal had submitted earlier this month.

The apparent change of heart was reflected in a statement by Arcelor after a five-hour meeting by its board on Sunday at company headquarters. Attendees said that despite its length, the meeting was not contentious.

"It was a long board meeting, but that was because there were more than 20 points on the agenda," a person involved in the meeting said. The board voted unanimously on "every single issue," he added.

A spokesman for Arcelor's board said Monday that the Mittal offer "continues to undervalue Arcelor," in part because it does not take into account the company's better-than-expected financial results for 2005 and the first quarter of 2006.

Arcelor reiterated that a 13 billion euro deal with the Russian steel company Severstal, which Arcelor says values it at 44 euros a share, was a better fit. Mittal's cash-and-share offer values Arcelor around 35 euros a share, based on Monday's stock price.

Still, the Arcelor board said it had given its management a mandate to meet with Mittal Steel "in order to review the improvements that Mittal Steel offered to make to its current offer." The board has 18 members — French, Spanish and German executives from a variety of corporate backgrounds, including energy and banking. Prince Guillaume of Luxembourg is also a member.

Investors responded positively to the news. Referring to Arcelor's board, Adrian Darley, senior investment manager with Gartmore Investment Management in London, which owns about 1.5 percent of Arcelor shares, said, "You could infer that they are even encouraging talks."

Mittal, for its part, denied on Monday that it was planning to increase its bid.

In a statement of its own issued after Arcelor's rebuff, the company said, "Mittal Steel has not made any proposal to improve the financial terms of its offer and has no intention to do so. It noted that if the Arcelor board recommended acceptance of its takeover offer, it was prepared to improve some terms related to corporate governance only.

Mittal said that the 44-euro-a-share figure was "entirely fictitious and without market substantiation." Some investors and analysts have also questioned the figure, because it relies in part on a valuation of Severstal and other assets that they say are overstated.

Mittal said once before that it would not improve its offer for Arcelor, but then did just that. Mr. Mittal is planning a news conference on Tuesday afternoon in London to discuss the situation.

If Arcelor does agree to a deal with Mittal, the Russian billionaire Aleksei Mordashov would be left in the cold. Mr. Mordashov agreed last month to exchange his stake in Severstal and other assets for about one-third of Arcelor. That deal has a break-up fee of 140 million euros that Arcelor would have to pay if it fell apart.

A spokesman for Mr. Mordashov, Robert M. Miller, a managing director of the Miller Mathis investment bank, said Monday that he was confident that Severstal's deal with Arcelor was in no danger. The Arcelor board has "done nothing more than restate what any board's fiduciary duty is" in agreeing to further discussions with Mittal, said Mr. Miller, whose bank is representing Mr. Mordashov. Arcelor provided a "strong powerful reaffirmation of our deal, and a clear message about the incompatibility of Mittal," he said.

Some Arcelor shareholders are upset by their company's deal with Severstal, in part because it requires an unprecedented number of investors to oppose it for it to be rejected. More than 50 percent of the outstanding shares would have to be voted against the transaction for it to be unwound at a meeting on June 30, and generally only about one-third of Arcelor shareholders vote on any action. Arcelor said Monday that this vote was "designed to encourage shareholder participation."

The company said it was including on the agenda a recent shareholder proposal that the deal be put to a more conventional vote, but it urged shareholders to reject that option.

If, after five months of trying, Mittal does not manage to acquire Arcelor, it will look to pursue other deals instead, a Morgan Stanley report on June 9 said, adding that the company could go after other steel giants like ThyssenKrupp of Germany.

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