ArcelorMittal to jointly bid with rival Nunavut for Canadian miner Baffinland
15 Jan 2011
The fierce four-month bidding war for the control of Baffinland Iron Mines Corp that pitted steel giant ArcelorMittal against Nunavut Iron Ore Acquisition Inc seemed to end yesterday after both rivals decided to make a joint sweetened offer for the Canadian iron ore miner.
In a move that caught the industry by surprise, ArcelorMittal and Nunavut made a joint offer of C$1.50 a share in cash for Baffinland, representing a premium of 168 per cent to the Toronto-based miner's stock price on 22 September, a day before Nunavut made a hostile offer of 80 Canadian cents a share.
The joint offer that values Baffinland at C$554.9 million ($561.9 million) is scheduled to expire on 24 January.
If the deal goes through, Luxemburg-based ArcelorMittal will own 70 per cent of Baffinland and Nunavut will own the remaining 30 per cent.
Has the new joint offer bought the deal to a conclusion? Maybe not yet, as Baffinland chairman and CEO Richard McCloskey, who had earlier supported ArcelorMittal's offer, said that he does not support the joint bid because he believes it is unfair to the company's other shareholders.
ArcelorMittal had earlier raised its bid four times from its November C$1.10 a share to its latest 6 January offer of C$1.40 a share or C$550 million, while Nunavut, which already holds about 10.5 per cent of Baffinland, sweetened its offer also for the fourth time to C$1.45 a share or C$570 million on 1 January.
