Regulatory News:
ArcelorMittal today announced that it has increased its offer
(the "Offer") for all outstanding common shares ("Common Shares")
of Baffinland Iron Mines Corporation ("Baffinland") and all
outstanding common share purchase warrants issued pursuant to a
warrant indenture dated 31 January 2007 (the "2007 Warrants") to
C$1.40 per Common Share.
The increased all cash offer represents a premium of
approximately 27% to ArcelorMittal’s original Offer price of C$1.10
per Common Share, and a premium of 150% to the trading price of the
Common Shares prior to Nunavut's original unsolicited offer in
September 2010.
Peter Kukielski, Head of Mining and Member of the Group
Management Board of ArcelorMittal said: “ArcelorMittal’s increased
Offer of C$1.40 per share for all Common Shares provides
demonstrably superior value and certainty for Baffinland
shareholders, compared to Nunavut Iron Ore Acquisition Inc.’s
revised coercive partial offer. Our Offer ensures shareholders
receive 100% cash for all of their shares, rather than cash for
just some shares and diluted value for the shares not taken up
under the Nunavut offer.”
If Nunavut Iron Ore Acquisition Inc.’s (“Nunavut”) revised offer
were successful, Baffinland shareholders would face the prospect of
being left with thinly traded minority Common Shares that would be
unlikely to reflect the full value of Baffinland's assets.
Furthermore, if Nunavut’s partial offer was successful and
Baffinland were to issue the approximately 157.4 million warrants
contemplated in their partial offer, a substantial overhang would
exist, which would lead to significant equity dilution, both of
which would likely have a negative impact on the trading value of
the remaining minority held Common Shares of Baffinland.
Since Nunavut already owns approximately 10.5% of the Common
Shares, it is effectively bidding for only approximately 49.5%, or
approximately 55.4% of the 89.5% of Common Shares it does not
currently own.
In order for the value of Nunavut’s revised coercive partial
offer to equal the C$1.40 per Common Share offered by
ArcelorMittal’s increased Offer (assuming a 55.4% pro rata take-up
under Nunavut’s offer), the remaining minority held Common Shares
would need to trade at C$1.18 per share (which assumes a warrant
value of C$0.23 per full warrant using Nunavut's volatility and
risk free rate assumptions as set out in its December 29
announcement), which is more than double the C$0.56 trading value
of the Common Shares prior to Nunavut’s original offer for all of
the Common Shares in September 2010. Assuming Common Shares
tendered to the Offer under lock-up agreements with ArcelorMittal
do not tender and there is a 76.6% take-up under the Nunavut
revised coercive partial offer, the remaining minority held Common
Shares would need to trade at C$1.06 per share for the value of
Nunavut’s revised coercive partial offer to equal the C$1.40 per
Common Share offered by ArcelorMittal’s increased Offer.
Nunavut's revised coercive partial offer leaves Baffinland
shareholders uncertain about:
- how many of their shares will be
taken-up due to the pro rationing of tendered shares;
- the price at which shares not taken up
by Nunavut would trade should the current partial offer by Nunavut
be completed;
- the timing of any amendment to its
offer to provide for exchange rights;
- whether warrants would be issued in the
future and the value such warrants represent; and
- Nunavut’s project development plan for
Baffinland.
As previously announced, ArcelorMittal has entered into a
lock-up agreement with Baffinland's largest shareholder, Resource
Capital Funds (“RCF”), pursuant to which RCF has tendered all of
its Common Shares and 2007 Warrants, representing approximately
22.5% of the outstanding Common Shares (on a fully diluted basis),
to the Offer. In addition, each of the directors and officers of
Baffinland have tendered all Common Shares and 2007 Warrants held
by them, representing a further approximately 2.4% of the
outstanding Common Shares (on a fully diluted basis), to the Offer
pursuant to lock-up agreements with ArcelorMittal. In addition, as
at 29 December 2010, no further conditions relating to regulatory
approvals are outstanding under the Offer.
The ArcelorMittal Offer remains subject to the same conditions
as the original Offer of 12 November 2010 as amended by the Notice
of Variation and Extension dated 18 December 2010.
The Support Agreement entered into between ArcelorMittal and
Baffinland on November 8, 2010 as amended December 18, 2010,
including the non-solicitation covenants and ArcelorMittal's right
to match any unsolicited superior proposal, remains in place.
ArcelorMittal has today mailed a notice of variation of the
Offer with respect to its increased Offer price of C$1.40 per
Common Share for all Common Shares to Baffinland securityholders.
The Offer price of C$0.10 per 2007 Warrant remains unchanged. The
revised Offer is open for acceptance until 11:59 p.m. (Toronto
time) on 10 January 2011, unless further extended or withdrawn.
ArcelorMittal has retained Georgeson Shareholder Communications
Canada Inc. as information agent in connection with the Offer.
Computershare Investor Services Inc. is the depositary for the
Offer. Any questions or requests for assistance or further
information on how to tender Common Shares or 2007 Warrants to the
Offer may be directed to, and copies of the above referenced
documents may be obtained by contacting, the information agent at
1-888-605-7641 or by email at askus@georgeson.com or by contacting
the depositary at 1-800-564-6253 (North America) or 1-514-982-7555
(overseas), or by email at corporateactions@computershare.com.
Securityholders whose Common Shares or 2007 Warrants are registered
in the name of a broker, investment dealer, bank, trust company or
other nominee should contact such nominee for assistance in
depositing their Common Shares and 2007 Warrants to the Offer.
Contact Information
Information Agent for the OfferGeorgesonToll Free (North
America): 1-888-605-7641Collect (Overseas): 1-781-575-2168E-Mail:
askus@georgeson.com
This document contains forward-looking information and
statements about ArcelorMittal and its subsidiaries. These
statements include financial projections and estimates, including
non-cash impairment charges, net financial debt and net debt to
EBITDA leverage ratio, statements regarding plans, objectives and
expectations with respect to future operations and statements
regarding future performance generally. Forward-looking statements
may be identified by the words "will," "believe," "expect" or
similar expressions. Although ArcelorMittal's management believes
that the expectations reflected in such forward-looking statements
are reasonable, investors and holders of ArcelorMittal's securities
are cautioned that forward-looking information and statements are
subject to numerous risks and uncertainties, many of which are
difficult to predict and generally beyond the control of
ArcelorMittal, that could cause actual results and developments to
differ materially and adversely from those expressed in, or implied
or projected by, the forward-looking information and statements.
These risks and uncertainties include those discussed or identified
in the filings with the Luxembourg Stock Market Authority for the
Financial Markets (Commission de Surveillance du Secteur Financier)
and the United States Securities and Exchange Commission (the
"SEC") made or to be made by ArcelorMittal, including
ArcelorMittal's Annual Report on Form 20-F for the year ended 31
December, 2009 filed with the SEC. ArcelorMittal undertakes no
obligation to publicly update its forward-looking statements,
whether as a result of new information, future events or
otherwise.
About ArcelorMittal
ArcelorMittal is the world's leading steel company, with
operations in more than 60 countries.
ArcelorMittal is the leader in all major global steel markets,
including automotive, construction, household appliances and
packaging, with leading R&D and technology, as well as sizeable
captive supplies of raw materials and outstanding distribution
networks. With an industrial presence in over 20 countries spanning
four continents, the Company covers all of the key steel markets,
from emerging to mature.
Through its core values of sustainability, quality and
leadership, ArcelorMittal commits to operating in a responsible way
with respect to the health, safety and wellbeing of its employees,
contractors and the communities in which it operates. It is also
committed to the sustainable management of the environment and of
finite resources. ArcelorMittal recognises that it has a
significant responsibility to tackle the global climate change
challenge; it takes a leading role in the industry's efforts to
develop breakthrough steelmaking technologies and is actively
researching and developing steel-based technologies and solutions
that contribute to combat climate change.
In 2009, ArcelorMittal had revenues of $65.1 billion and crude
steel production of 73.2 million tonnes, representing approximately
8 per cent of world steel output.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on
the Spanish stock exchanges of Barcelona, Bilbao, Madrid and
Valencia (MTS).
For more information about ArcelorMittal visit:
www.arcelormittal.com
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