UPDATE: ArcelorMittal, Nunavut Iron Join Forces In Bid For Baffinland
14 Gennaio 2011 - 5:46PM
Dow Jones News
A takeover fight for Canada's Baffinland Iron Mines Corp.
(BIM.T) between international steel giant ArcelorMittal (MT) and
shareholder group Nunavut Iron Ore Acquisition Inc. ended Friday
after the two agreed to come together in a sweetened joint bid.
ArcelorMittal, the world's largest steel producer, said Nunavut
Iron will join it in an all-cash bid for Baffinland at C$1.50 a
share, or C$550 million. ArcelorMittal would own 70% of Baffinland
and Nunavut Iron would own the remainder.
The joint bid is up from C$1.40 a share ArcelorMittal last
offered, and well above the 80 Canadian cents a share Nunavut Iron
offered for Baffinland when the bidding first began in
September.
Baffinland stoked the interest of several international mining
companies early last year when it said it was looking for a partner
to develop its C$4 billion Mary River iron ore project, considered
to be one of the best undeveloped iron ore mines in the world, and
expected to produce 18 million tons a year over 21 years.
ArcelorMittal's latest offer is its fourth as it engaged in
back-and-forth bidding with Nunavut Iron, an entity created by
Houston private equity firm The Energy & Minerals Group, which
owns 10.3% of Baffinland's shares. Nunavut Iron had made a hostile
partial offer for 60% of Baffinland's shares at C$1.45 each, plus
warrants for the remaining holders.
Baffinland's board had given its support to ArcelorMittal's bid,
and agreed to tender their shares representing a 2.4% stake.
Resource Capital Funds, Baffinland's largest shareholder with a
22.5% stake, also agreed to support ArcelorMittal's bid.
The new joint bid expires on Jan. 24, and two-thirds of
shareholders must vote in favor for the deal to be approved.
"Together with Nunavut Iron, we are providing a more attractive
offer to Baffinland shareholders than either of us were prepared to
provide on our own," said Peter Kukielski, head of mining at
ArcelorMittal.
Representatives of Nunavut Iron and Baffinland weren't
immediately available to comment.
Shares of Baffinland recently traded on the Toronto Stock
Exchange at C$1.52 each.
-By Edward Welsch and Devon Maylie, Dow Jones Newswires;
403-229-9095; edward.welsch@dowjones.com
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