2nd UPDATE: ArcelorMittal Boosts Baffinland Bid To C$1.40/Share
31 Dicembre 2010 - 8:54PM
Dow Jones News
Steel giant ArcelorMittal (MT) matched the price of Nunavut Iron
Ore Acquisition Inc.'s sweetened bid for Baffinland Iron Mines
Corp. (BIM.T) Friday, the latest move in a three-month battle for
control of the junior miner.
Luxembourg-based ArcelorMittal, the world's largest steelmaker,
raised its offer to C$1.40 a share from C$1.25 for 100% of
Baffinland. Its latest bid is a premium of about 27% to its
original offer.
Earlier this week, Nunavut Iron Ore lifted its hostile offer to
C$1.40 a share for a 60% stake in Baffinland, up from C$1.35 a
share for a 50.1% interest. Nunavut already controls 40.7 million
Baffinland shares, or about 10%.
In Toronto Friday, Baffinland was recently up 5 Canadian cents,
or 3.6%, to C$1.43, amid speculation that Nunavut may make a
counter offer. The stock closed at 56 Canadian cents on Sept. 21,
the day before Nunavut Iron Ore announced its initial offer.
Nunavut Iron Ore is considering its options, spokesman John Lute
said.
ArcelorMittal and Nunavut Iron Ore have been embroiled in a
lengthy takeover fight for Baffinland, whose Mary River iron-ore
property in Canada's Nunavut Territory is a number of years away
from production.
"Given the tremendous potential of the Mary River project, if
it's developed properly under new ownership, we think there are a
lot of shareholders who understand that the current bid is still
better value for them than the ArcelorMittal offer," Lute said.
Nunavut Iron Ore, owned by Iron Ore Holdings LP, a limited
partnership controlled by Bruce Walter, Jowdat Waheed and funds
managed by Energy Minerals Group, launched the bidding in September
with an 80-Canadian-cent a share hostile bid for all of Baffinland,
which the target company rejected. Baffinland instead agreed to a
C$1.10-a-share offer from ArcelorMittal, which it later boosted to
C$1.25 a share.
The latest offers from both ArcelorMittal and Nunavut Iron Ore
expire Jan. 10.
Raymond James analyst Tom Meyer raised his target price for
Baffinland to C$1.40 from C$1.25, and reiterated his view that
shareholders should tender to ArcelorMittal's offer for 100%
control.
In a statement Friday, Baffinland Vice Chairwoman Daniella
Dimitrov called ArcelorMittal's new offer "both transparent and
compelling" and said Baffinland's board is unanimously recommending
that shareholders tender to the steelmaker's increased offer.
Baffinland's directors, officers and largest shareholder
Resource Capital Funds, which represents about 25% of the
outstanding shares, have signed lock-up agreements to tender their
stock to ArcelorMittal.
-By Caroline Van Hasselt; Dow Jones Newswires; 416-306-2023;
caroline.vanhasselt@dowjones.com
(Judy McKinnon in Toronto contributed to this article.)
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