Thu Feb 3, 2011 11:41am GMT
* Arcelor, Nunavut hold 67 pct shares,
* Represents 64 percent of fully dilutes shares
Feb 3 (Reuters) - ArcelorMittal (ISPA.AS: Quote) and Nunavut Iron Ore inched closer to taking control of Baffinland Iron Mines (BIM.TO: Quote) as they took an additional 6.2 million shares in the junior explorer, raising their ownership to 64 percent.
The world's No. 1 steelmaker and private equity-backed Nunavut, which were earlier locked in a battle to get Baffinland's Mary River project in the Canadian Arctic, made a joint bid of C$1.50 a share for Baffinland last month.
Between them, ArcelorMittal and Nunavut now hold 67 percent of all outstanding shares and 45 percent of outstanding 2007 warrants, representing 64 percent of fully diluted shares.
ArcelorMittal and Nunavut have agreed to split their ownership of Baffinland at 70 percent and 30 percent.
The C$590 million offer is set to expire on Friday.
Shares of Baffinland, which owns nine high-grade deposits that could hold enough iron ore to supply all of Europe for years to come, closed at C$1.50 on Wednesday on the Toronto Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Unnikrishnan Nair, aftab.ahmed@thomsonreuters.com; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net)
Showing posts with label Canada's Baffinland iron mines. Show all posts
Showing posts with label Canada's Baffinland iron mines. Show all posts
Friday, February 4, 2011
Wednesday, February 2, 2011
ArcelorMittal, partner buy more Baffinland stock
Wed 2 Feb, 2011
TORONTO: ArcelorMittal and Nunavut Iron Ore Acquisition Inc , which are now the joint owners of Canada's iron ore-rich Baffinland Iron Mines Corporation , Tuesday announced taking up an additional 4,773,400 common shares of Baffinland at their outstanding offer of $1.50 per share.
Abandoning their rivalry to take over Baffinland, ArcelorMittal and Nunavut made a joint bid for the Toronto-based iron-ore giant January 14 at $1.50 per per share.
With their successful $590-million bid last week, the two became joint owners of Baffinland, with ArcelorMittal controlling the larger stake of 70 percent and Nunavat 30 percent.
Holding about 60 percent of Baffinland stock at the time of their takeover, the two partners waived a two-thirds minimum tender condition and offered to buy the remaining shares at $1.50 per share till February 4.
The additional acquisition of common shares announced Tuesday takes their share of Baffinland stock to 65 percent.
The new owners said their "offer remains open for acceptance until 11:59 p.m. (Toronto time) on February 4, 2011, to allow Baffinland security holders who have not yet tendered their common shares and 2007 Warrants time to do so and receive prompt payment for their tendered securities.''
The battle for Baffinland began in September when Nunavat offered 80 cents a share for a majority stake in it and ArcelorMittal entered the fray with its offer of $1.10 per share for 100 percent control.
Both eyed Baffinland's 365 million tonnes of iron ore at its Mary River site in Canadian Arctic.
The Mary River project, which needs $4 billion to complete, can yield up to 18 million tonnes of iron ore annually for up to two decades.
Investment bank Jennings Capital Inc. says the project holds "the best undeveloped iron ore deposit in the world.''
TORONTO: ArcelorMittal and Nunavut Iron Ore Acquisition Inc , which are now the joint owners of Canada's iron ore-rich Baffinland Iron Mines Corporation , Tuesday announced taking up an additional 4,773,400 common shares of Baffinland at their outstanding offer of $1.50 per share.
Abandoning their rivalry to take over Baffinland, ArcelorMittal and Nunavut made a joint bid for the Toronto-based iron-ore giant January 14 at $1.50 per per share.
With their successful $590-million bid last week, the two became joint owners of Baffinland, with ArcelorMittal controlling the larger stake of 70 percent and Nunavat 30 percent.
Holding about 60 percent of Baffinland stock at the time of their takeover, the two partners waived a two-thirds minimum tender condition and offered to buy the remaining shares at $1.50 per share till February 4.
The additional acquisition of common shares announced Tuesday takes their share of Baffinland stock to 65 percent.
The new owners said their "offer remains open for acceptance until 11:59 p.m. (Toronto time) on February 4, 2011, to allow Baffinland security holders who have not yet tendered their common shares and 2007 Warrants time to do so and receive prompt payment for their tendered securities.''
The battle for Baffinland began in September when Nunavat offered 80 cents a share for a majority stake in it and ArcelorMittal entered the fray with its offer of $1.10 per share for 100 percent control.
Both eyed Baffinland's 365 million tonnes of iron ore at its Mary River site in Canadian Arctic.
The Mary River project, which needs $4 billion to complete, can yield up to 18 million tonnes of iron ore annually for up to two decades.
Investment bank Jennings Capital Inc. says the project holds "the best undeveloped iron ore deposit in the world.''
Thursday, January 27, 2011
Former Baffinland CEO fighting for minority shareholders
Thursday, 27 Jan 2011
The Canadian Press reported that the former CEO of Baffinland Iron Mines will continue to fight for the minority shareholders of his former company after a joint venture led by ArcelorMittal announced it has won control of the firm.
Mr Gord McCreary had been working on rival offer for Baffinland involving an unidentified Chinese bidder before ArcelorMittal and its private equity partner announced that they now control about 60% of the company's shares.
Mr McCreary said “It's all about maximizing value for minority shareholders, so I've got several irons in the fire and keep charging ahead.”
However, Mr McCreary declined to be specific about what possibilities he might be pursuing.
He said "I'm still fully engaged working 20 hour days on this.”
(Sourced from The Canadian Press)
Wednesday, January 26, 2011
Baffinland takeover saga nearing an end
January 26, 2011News Services After some dramatic twists and turns, the wild takeover saga of Baffinland Iron Mines Corp. appears to be nearing a conclusion.
Joint bidders ArcelorMittal and Nunavut Iron Ore Acquisition Corp. assumed control of Toronto-based Baffinland Tuesday after taking up more than half its shares in their joint $590-million takeover bid.
The two companies said they now have control over 59% of Baffinland shares.sourced: Postmedia News
Joint bidders ArcelorMittal and Nunavut Iron Ore Acquisition Corp. assumed control of Toronto-based Baffinland Tuesday after taking up more than half its shares in their joint $590-million takeover bid.
The two companies said they now have control over 59% of Baffinland shares.sourced: Postmedia News
ArcelorMittal on course to seize Baffinland
Tuesday, January 25, 2011 TORONTO (Reuters) - A majority of shareholders Baffinland Iron endorsed the offer of 590 million Canadian dollars (434 million) and Nunavut ArcelorMittal, announced Tuesday the specialist steel.
ArcelorMittal said it had collected 61% of the shares Baffinland through this joint operation with Nunavut Iron and supported by a fund of U.S. investment capital.
The offer is conditional upon obtaining at least two-thirds of the capital Baffinland, said ArcelorMittal in a statement.
ArcelorMittal said it had collected 61% of the shares Baffinland through this joint operation with Nunavut Iron and supported by a fund of U.S. investment capital.
The offer is conditional upon obtaining at least two-thirds of the capital Baffinland, said ArcelorMittal in a statement.
After four months of battle, ArcelorMittal and Nunavut joined earlier this month to propose a joint bid on Baffinland, which has vast reserves of iron ore in the Canadian Arctic.
Under the agreement between the former rivals, ArcelorMittal will acquire all of Baffinland. The group's capital will then be divided between the two groups, 70% for Arcelor, the remainder returning to Nunavut.
The joint bid for $ 1.50 Canadian per share expired at midnight Monday. It was extended to February 4 to allow time for other shareholders to tender their shares.
"They hold the right end, so I think that shareholders should consider subscribing to the offer by the new deadline," said Peter Campbell, an analyst in the mining sector with Jennings Capital in Toronto.
"I think there is really no reason not to."
With this transaction, ArcelorMittal would be less dependent on major producers of iron ore, like BHP Billiton and Vale, to supply its mills. (sourced:Reuters)
Sunday, January 23, 2011
OSC declines to comment on request by Baffinland Iron Mine
Sunday, 23 Jan 2011
Bloomberg reported that Ontario's securities regulator declined to comment on a request by a former Baffinland Iron Mines Corporation executive seeking to temporarily block an ArcelorMittal led takeover before a January 24th 2011 deadline.
In a letter to the Ontario Securities Commission, Mr Gord McCreary former CEO said that Baffinland shareholders haven't been provided with enough information about the proposed CAD 590 million joint offer from ArcelorMittal and Nunavut Iron Ore Acquisition Inc. The OSC should investigate whether to stop trading in Baffinland shares tendered to the offer.
Mr McCreary said that "It would appear that the offeror have come to an agreement for the sole purpose of purchasing the securities of Baffinland without further price escalation, thereby denying the non related security holders of Baffinland of a fundamental benefit of the competitive bid process."
Ms Carolyn Shaw Rimmington, an OSC spokeswoman, said that it's the commission's policy not to comment on any correspondence it may have received.
ArcelorMittal and Nunavut, backed by Houston based private equity firm Energy & Minerals Group, had been in a bidding war for Baffinland when on January 14th 2011 they said they were combining forces to make a CAD 1.50 per share bid for Baffinland. Under the terms of the offer, ArcelorMittal would end up controlling 70% of Baffinland and Nunavut the rest.
Mr Tom Johnson, a New York based ArcelorMittal spokesman, said that "Our bid is in best interests of all shareholders. Nunavut is receiving no special treatment here and will be responsible for bearing its pro rata share of the purchase price and all costs associated with the joint offer, and the development of the Mary River Project."
Mr Bruce Walter chairman of Nunavut said that "We are confident that our offer complies with all applicable laws and that it will be proceeding on schedule."
Baffinland said this week that it recommended shareholders accept the joint takeover offer.
Mr Richard McCloskey CEO of Baffinland said that "We supported the bid. It's up to the shareholders to decide."
Mr McCreary said in a telephone interview that he's negotiating with two Chinese companies that may be interested in making a competing bid for Baffinland, which is developing the Mary River project in the Canadian Arctic.
The value of the joint offer from ArcelorMittal and Nunavut was calculated using the 393.39 million outstanding Baffinland shares cited in a January 10th 2011 Nunavut statement.(Sourced from bloomberg)
Bloomberg reported that Ontario's securities regulator declined to comment on a request by a former Baffinland Iron Mines Corporation executive seeking to temporarily block an ArcelorMittal led takeover before a January 24th 2011 deadline.
In a letter to the Ontario Securities Commission, Mr Gord McCreary former CEO said that Baffinland shareholders haven't been provided with enough information about the proposed CAD 590 million joint offer from ArcelorMittal and Nunavut Iron Ore Acquisition Inc. The OSC should investigate whether to stop trading in Baffinland shares tendered to the offer.
Mr McCreary said that "It would appear that the offeror have come to an agreement for the sole purpose of purchasing the securities of Baffinland without further price escalation, thereby denying the non related security holders of Baffinland of a fundamental benefit of the competitive bid process."
Ms Carolyn Shaw Rimmington, an OSC spokeswoman, said that it's the commission's policy not to comment on any correspondence it may have received.
ArcelorMittal and Nunavut, backed by Houston based private equity firm Energy & Minerals Group, had been in a bidding war for Baffinland when on January 14th 2011 they said they were combining forces to make a CAD 1.50 per share bid for Baffinland. Under the terms of the offer, ArcelorMittal would end up controlling 70% of Baffinland and Nunavut the rest.
Mr Tom Johnson, a New York based ArcelorMittal spokesman, said that "Our bid is in best interests of all shareholders. Nunavut is receiving no special treatment here and will be responsible for bearing its pro rata share of the purchase price and all costs associated with the joint offer, and the development of the Mary River Project."
Mr Bruce Walter chairman of Nunavut said that "We are confident that our offer complies with all applicable laws and that it will be proceeding on schedule."
Baffinland said this week that it recommended shareholders accept the joint takeover offer.
Mr Richard McCloskey CEO of Baffinland said that "We supported the bid. It's up to the shareholders to decide."
Mr McCreary said in a telephone interview that he's negotiating with two Chinese companies that may be interested in making a competing bid for Baffinland, which is developing the Mary River project in the Canadian Arctic.
The value of the joint offer from ArcelorMittal and Nunavut was calculated using the 393.39 million outstanding Baffinland shares cited in a January 10th 2011 Nunavut statement.(Sourced from bloomberg)
Tuesday, January 18, 2011
Developing Arctic iron ore mine is no easy task
Tue Jan 18, 2011 4:06pm GMT By Julie Gordon
TORONTO, Jan 18 (Reuters) - Developing Canada's Mary River iron ore deposit, a rich reserve that could supply Europe for years, will test the boundaries of working in the Arctic and could herald the future of global mining.
It has taken 47 years, near-record iron ore prices and a bidding war to get the project to a point where developing a working mine seems like a legitimate possibility.
A takeover battle between ArcelorMittal (ISPA.AS: Quote) and Nunavut Iron Ore ended last week with a combined bid to take joint control of Baffinland Iron Mines (BIM.TO: Quote), whose board has endorsed the offer. That means Baffinland's Mary River project could finally start production as early as 2013.
Even so, getting the ore out of the ground in a polar desert - considered Canada's harshest environment -- and loaded on to Europe-bound ships is a daunting task.
"You've got problems of remoteness, of weather, and of darkness," said Victor Pakalnis of the Robert M. Buchan Department of Mining at Queen's University in Kingston, Ontario. "It's a different environment than most of us are used to."
The project is located about 3,000 km (1,864 miles) due north of Toronto within the Arctic Circle, where in winter the average temperature dips below minus 28 degrees Celsius and near 24-hour darkness is the norm.
"There's also the challenge of working with permafrost - permanently frozen ground," Pakalnis said.
As permafrost melts over the summer months, the soil becomes weak causing buildings and roads and other infrastructure to shift.
"You've got to have some insulating capacity," Pakalnis said. "The shifting can destroy roads and railway lines."
sourced by reuters
TORONTO, Jan 18 (Reuters) - Developing Canada's Mary River iron ore deposit, a rich reserve that could supply Europe for years, will test the boundaries of working in the Arctic and could herald the future of global mining.
It has taken 47 years, near-record iron ore prices and a bidding war to get the project to a point where developing a working mine seems like a legitimate possibility.
A takeover battle between ArcelorMittal (ISPA.AS: Quote) and Nunavut Iron Ore ended last week with a combined bid to take joint control of Baffinland Iron Mines (BIM.TO: Quote), whose board has endorsed the offer. That means Baffinland's Mary River project could finally start production as early as 2013.
Even so, getting the ore out of the ground in a polar desert - considered Canada's harshest environment -- and loaded on to Europe-bound ships is a daunting task.
"You've got problems of remoteness, of weather, and of darkness," said Victor Pakalnis of the Robert M. Buchan Department of Mining at Queen's University in Kingston, Ontario. "It's a different environment than most of us are used to."
The project is located about 3,000 km (1,864 miles) due north of Toronto within the Arctic Circle, where in winter the average temperature dips below minus 28 degrees Celsius and near 24-hour darkness is the norm.
"There's also the challenge of working with permafrost - permanently frozen ground," Pakalnis said.
As permafrost melts over the summer months, the soil becomes weak causing buildings and roads and other infrastructure to shift.
"You've got to have some insulating capacity," Pakalnis said. "The shifting can destroy roads and railway lines."
sourced by reuters
Ex-Baffinland CEO 'more confident', still sees Chinese interest
By: Liezel Hill17th January 2011
TORONTO (miningweekly.com) : Gord McCreary, who resigned from the board of Baffinland Iron Mines in November, after the company agreed to support a takeover bid from ArcelorMittal, said at the weekend he is still working to get a better offer on the table.
McCreary is focused on a specific, unidentified Chinese State-owned company, which he says has shown strong interest in Baffinland and its Mary River iron-ore project.
“I am more confident now than I have been in the past, yes,” he said in an interview from Beijing on Saturday.
There is “very definitely” still interest in China in Baffinland and its asset, he said.
“I can't quantify it in percentage terms in terms of likelihood and that sort of thing, all I can do is keep my head down and go as hard as I possibly can to get there.”
McCreary, who owns about 2,3-million shares of Baffinland, had dismissed successive offers from ArcelorMittal and hostile bidder Nunavut Iron Ore Acquisition as too low, and told Mining Weekly Online he was also not impressed by the announcement on Friday that the former rivals have agreed on a new joint offer for Baffinland.
Even in the absence of another offer, McCreary said he would not tender his stake in Baffinland to the new C$1,50 a share offer, which he described as a “sweetheart deal” for Nunavut.
The new offer is scheduled to close on January 24, which, unless there are any more surprises, gives McCreary a 'hard' deadline for his plan to get an alternative bid on the table.
Shares in Baffinland declined 2,6% on Monday, to C$1,51 apiece by 14:18 in Toronto.
Baffinland's board of directors said earlier in the day it has recommended the joint ArcelorMittal-Nunavut offer to shareholders, and added that it had not received any third-party acquisition proposals.
ROAD HAULAGE
Besides the new joint offer, another significant piece of news emerged last week in the form of a feasibility study published by Baffinland on the potential to start production from Mary River on a smaller scale, using trucks to transport ore to port.
The road haulage project would require an initial capital of C$605-million if the company hired a contractor to operate the project, while the C$740-million figure assumes it would be owner operated.
That is significantly lower than the $4-billion estimated for the original project plan, which includes rail and port infrastructure.
Operating costs are estimated at C$29/t under the project owner, or C$63/t if a contractor were brought in, and production from the road-haulage project could start in 2013, with about one-million tons of iron-ore being shipped, Baffinland said.
TORONTO (miningweekly.com) : Gord McCreary, who resigned from the board of Baffinland Iron Mines in November, after the company agreed to support a takeover bid from ArcelorMittal, said at the weekend he is still working to get a better offer on the table.
McCreary is focused on a specific, unidentified Chinese State-owned company, which he says has shown strong interest in Baffinland and its Mary River iron-ore project.
“I am more confident now than I have been in the past, yes,” he said in an interview from Beijing on Saturday.
There is “very definitely” still interest in China in Baffinland and its asset, he said.
“I can't quantify it in percentage terms in terms of likelihood and that sort of thing, all I can do is keep my head down and go as hard as I possibly can to get there.”
McCreary, who owns about 2,3-million shares of Baffinland, had dismissed successive offers from ArcelorMittal and hostile bidder Nunavut Iron Ore Acquisition as too low, and told Mining Weekly Online he was also not impressed by the announcement on Friday that the former rivals have agreed on a new joint offer for Baffinland.
Even in the absence of another offer, McCreary said he would not tender his stake in Baffinland to the new C$1,50 a share offer, which he described as a “sweetheart deal” for Nunavut.
The new offer is scheduled to close on January 24, which, unless there are any more surprises, gives McCreary a 'hard' deadline for his plan to get an alternative bid on the table.
Shares in Baffinland declined 2,6% on Monday, to C$1,51 apiece by 14:18 in Toronto.
Baffinland's board of directors said earlier in the day it has recommended the joint ArcelorMittal-Nunavut offer to shareholders, and added that it had not received any third-party acquisition proposals.
ROAD HAULAGE
Besides the new joint offer, another significant piece of news emerged last week in the form of a feasibility study published by Baffinland on the potential to start production from Mary River on a smaller scale, using trucks to transport ore to port.
The road haulage project would require an initial capital of C$605-million if the company hired a contractor to operate the project, while the C$740-million figure assumes it would be owner operated.
That is significantly lower than the $4-billion estimated for the original project plan, which includes rail and port infrastructure.
Operating costs are estimated at C$29/t under the project owner, or C$63/t if a contractor were brought in, and production from the road-haulage project could start in 2013, with about one-million tons of iron-ore being shipped, Baffinland said.
Friday, January 14, 2011
Arcelormittal, Nunavut Join Forces to Offer $1.51 a Share for Baffinland
Source: Bloomberg, by Thomas Biesheuvel and Natalie Doss - Jan 14, 2011
ArcelorMittal, the largest producer of steel, joined with Nunavut Iron Ore Acquisition Inc. in a bid for Baffinland Iron Mines Corp. valued at about C$519 million ($522 million) that seeks to end a three-month takeover battle.
The two companies offered C$1.50 ($1.51) a share for 100 percent of Baffinland, Luxembourg-based ArcelorMittal said in a statement today. Nunavut previously bid C$1.45 a share for 60 percent and ArcelorMittal C$1.40 apiece for the entire company.
ArcelorMittal and Nunavut, backed by Houston-based private equity-firm Energy & Minerals Group, were vying for Baffinland’s Mary River project in the Canadian Arctic. ArcelorMittal, based in Luxembourg, is seeking greater access to iron ore as prices for the steelmaking material rise. ArcelorMittal would hold 70 percent of Baffinland and Nunavut the rest under the new offer.
The Mary River project contains an estimated 365 million metric tons of reserves and 500 million tons of resources in three deposits that have been partially explored.
“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,” Peter Kukielski, head of mining at ArcelorMittal, said in the statement.
Daniella Dimitrov, vice chairwoman of Baffinland, Richard McCloskey, chief executive officer, and Michael Zurowski, executive vice president, didn’t immediately return telephone calls seeking comment.
Baffinland rose 3 cents, or 1.9 percent, to C$1.54 as of 9:47 a.m. in Toronto Stock Exchange trading. ArcelorMittal slid 0.3 percent to 27.195 euros by 4.11 p.m. in Amsterdam.
The new bid’s value was calculated using the 345.86 million of outstanding Baffinland shares, according to Bloomberg data.
Sunday, January 9, 2011
Mittal’s Offer For Canadian Mining Company Gets A Rival Bidder
Source: The Link, Saturday, January 8th, 2011
TORONTO– The fight between ArcelorMittal and Nunavut Iron Ore Acquisition Inc. for control of Baffinland Iron Mines Corp is heating up as the latter has now made a higher offer of $1.45 a share for the Toronto-based company. ArcelorMittal had on Friday raised its offer from $1.25 to $1.40 to beat rival Nunavat Iron Ore Acquisition Inc’s $1.35. The Luxembourg-based steel giant hiked its offer after the expiry its previous offer of $1.25 or $492 million passed Thursday mid-night. Its new offer amounts to $550.7 million.
But Nunavat, which was formed by a former Baffinland executive just to launch a hostile bid and is backed by American equity firm Energy & Minerals Group, is no mood to relent as it has raised its offer to $1.45 a share for a 60% stake in Baffinland.
Thus, Nunavat’s new offer values Baffinland at $570 million – $20 million higher than ArcelorMittal’s offer. Nunavat already owns 10% stake in Baffinland.
Both the companies have set the deadline of January 10 for Baffinland to accept their new offers. ArcelorMittal and Nunavat are fighting for control of Baffinland because of its huge 365 million tonnes of iron ore reserves at its Mary River project in far northern reaches of Canada.
It is estimated that the Mary River project can produce 18 million tonnes of iron ore annually for up to two decades. According to investment bank Jennings Capital Inc., the project is “possibly the best undeveloped iron ore deposit in the world.”
The battle for Baffinland began in September when Nunavat mounted its hostile bid with an offer of 80 cents a share. ArcelorMittal entered the fray with its offer of $1.10 cents – which was later raised to $1.25.
But Baffinland’s board and its largest shareholder Resource Capital Funds have all along favoured ArcelorMittal over Nunavut because Nunavat’s senior executive Jowdat Waheed worked for it (Baffinland) just before launching the hostile bid.
Baffinland accuses Waheed of breaking confidentiality agreements when he engineered bid for its hostile takeover.
News via The Link, Leading Indo-Canadian Newspaper
TORONTO– The fight between ArcelorMittal and Nunavut Iron Ore Acquisition Inc. for control of Baffinland Iron Mines Corp is heating up as the latter has now made a higher offer of $1.45 a share for the Toronto-based company. ArcelorMittal had on Friday raised its offer from $1.25 to $1.40 to beat rival Nunavat Iron Ore Acquisition Inc’s $1.35. The Luxembourg-based steel giant hiked its offer after the expiry its previous offer of $1.25 or $492 million passed Thursday mid-night. Its new offer amounts to $550.7 million.
But Nunavat, which was formed by a former Baffinland executive just to launch a hostile bid and is backed by American equity firm Energy & Minerals Group, is no mood to relent as it has raised its offer to $1.45 a share for a 60% stake in Baffinland.
Thus, Nunavat’s new offer values Baffinland at $570 million – $20 million higher than ArcelorMittal’s offer. Nunavat already owns 10% stake in Baffinland.
Both the companies have set the deadline of January 10 for Baffinland to accept their new offers. ArcelorMittal and Nunavat are fighting for control of Baffinland because of its huge 365 million tonnes of iron ore reserves at its Mary River project in far northern reaches of Canada.
It is estimated that the Mary River project can produce 18 million tonnes of iron ore annually for up to two decades. According to investment bank Jennings Capital Inc., the project is “possibly the best undeveloped iron ore deposit in the world.”
The battle for Baffinland began in September when Nunavat mounted its hostile bid with an offer of 80 cents a share. ArcelorMittal entered the fray with its offer of $1.10 cents – which was later raised to $1.25.
But Baffinland’s board and its largest shareholder Resource Capital Funds have all along favoured ArcelorMittal over Nunavut because Nunavat’s senior executive Jowdat Waheed worked for it (Baffinland) just before launching the hostile bid.
Baffinland accuses Waheed of breaking confidentiality agreements when he engineered bid for its hostile takeover.
News via The Link, Leading Indo-Canadian Newspaper
Monday, January 3, 2011
ArcelorMittal raises Baffinland offer to $551 Million amid takover battle
ArcelorMittal, the world’s largest steelmaker, increased its offer for Canada’s Baffinland Iron Mines Corp. as it seeks to win over shareholders amid a three- month takeover battle.
ArcelorMittal bid C$1.40 ($1.40) a share in cash for all Baffinland shares, the Luxembourg-based company said today in a statement. That’s 27 percent more than its original offer and compares with a C$1.40 hostile bid for 60 percent of Baffinland’s stock from Nunavut Iron Ore Acquisition Inc. this week.
“This is the knockout punch,” Peter Campbell, an analyst at Jennings Capital Inc. in Toronto, said today in a telephone interview. “I suppose Nunavut could secure additional funds, but this is getting expensive for them.” He valued the bid at C$550.7 million, not including outstanding warrants.
Nunavut, a venture formed in August to buy Baffinland, and ArcelorMittal are vying to gain control of the Mary River iron- ore project in the Arctic. ArcelorMittal, which on Dec. 18 raised its offer to C$1.25 a share, is seeking greater access to the steelmaking ingredient as prices climb. Baffinland’s board today recommended that holders tender their shares to the ArcelorMittal offer.
Baffinland advanced 5 cents, or 3.6 percent, to C$1.43 at 3:59 p.m. in Toronto Stock Exchange trading. The shares have more than doubled this year.
‘Tremendous Upside’
“We will be considering our options in light of Arcelor’s new offer,” Nunavut’s Chairman Bruce Walter said today in an e- mail. “Given the tremendous upside of the Mary River project if it is developed under strong ownership, there are many shareholders who understand that our current bid still provides better economic value to them than the Arcelor offer.”
“We’re fully supportive” of the ArcelorMittal offer, Daniella Dimitrov, vice chairwoman of Toronto-based Baffinland, said in a telephone interview.
ArcelorMittal’s increased offer provides “demonstrably superior value and certainty for Baffinland shareholders, compared to Nunavut Iron Ore Acquisition Inc.’s revised coercive partial offer,” Peter Kukielski, ArcelorMittal’s head of mining, said in the statement.
Bidding War
The increased bid is 150 percent more than Baffinland’s price prior to Nunavut’s original 80-cent offer in September. ArcelorMittal entered the bidding when it agreed to pay C$1.10 in November, an approach that was countered by Nunavut with a C$1.35-a-share bid for 50.1 percent of the company on Dec. 15. Nunavut is backed by U.S. private equity firm Energy & Minerals Group.
ArcelorMittal’s bid is open for acceptance until 11:59 p.m. Toronto time on Jan. 10, the company said in the statement. Tom Johnson, a spokesman for ArcelorMittal in New York, had no comment beyond the press release.
Prices for iron ore and coking coal have surged this year because of demand from China, the largest steel producer. The cost of iron ore almost doubled in the April quarter and gained more than 20 percent in the June-to-September period.
ArcelorMittal said in September it planned to spend $4 billion to increase iron-ore production to 100 million metric tons a year by 2015.
The Mary River deposit, which holds reserves of 365 million metric tons of iron ore, is located about 620 miles (1,000 kilometers) northwest of Iqaluit, the capital of Nunavut, the largest of Canada’s three northern territories.
Gordon McCreary, the former Baffinland chairman who is seeking an outside bid from a Chinese company, said last week that discussions with a state-owned company are in an “advanced state.” He resigned from Baffinland’s board in November over its acceptance of ArcelorMittal’s first offer, which he considered too low.
Courtsey news via Bloomerg by the reporter Natalie Doss in New York at ndoss@bloomberg.net.
ArcelorMittal bid C$1.40 ($1.40) a share in cash for all Baffinland shares, the Luxembourg-based company said today in a statement. That’s 27 percent more than its original offer and compares with a C$1.40 hostile bid for 60 percent of Baffinland’s stock from Nunavut Iron Ore Acquisition Inc. this week.
“This is the knockout punch,” Peter Campbell, an analyst at Jennings Capital Inc. in Toronto, said today in a telephone interview. “I suppose Nunavut could secure additional funds, but this is getting expensive for them.” He valued the bid at C$550.7 million, not including outstanding warrants.
Nunavut, a venture formed in August to buy Baffinland, and ArcelorMittal are vying to gain control of the Mary River iron- ore project in the Arctic. ArcelorMittal, which on Dec. 18 raised its offer to C$1.25 a share, is seeking greater access to the steelmaking ingredient as prices climb. Baffinland’s board today recommended that holders tender their shares to the ArcelorMittal offer.
Baffinland advanced 5 cents, or 3.6 percent, to C$1.43 at 3:59 p.m. in Toronto Stock Exchange trading. The shares have more than doubled this year.
‘Tremendous Upside’
“We will be considering our options in light of Arcelor’s new offer,” Nunavut’s Chairman Bruce Walter said today in an e- mail. “Given the tremendous upside of the Mary River project if it is developed under strong ownership, there are many shareholders who understand that our current bid still provides better economic value to them than the Arcelor offer.”
“We’re fully supportive” of the ArcelorMittal offer, Daniella Dimitrov, vice chairwoman of Toronto-based Baffinland, said in a telephone interview.
ArcelorMittal’s increased offer provides “demonstrably superior value and certainty for Baffinland shareholders, compared to Nunavut Iron Ore Acquisition Inc.’s revised coercive partial offer,” Peter Kukielski, ArcelorMittal’s head of mining, said in the statement.
Bidding War
The increased bid is 150 percent more than Baffinland’s price prior to Nunavut’s original 80-cent offer in September. ArcelorMittal entered the bidding when it agreed to pay C$1.10 in November, an approach that was countered by Nunavut with a C$1.35-a-share bid for 50.1 percent of the company on Dec. 15. Nunavut is backed by U.S. private equity firm Energy & Minerals Group.
ArcelorMittal’s bid is open for acceptance until 11:59 p.m. Toronto time on Jan. 10, the company said in the statement. Tom Johnson, a spokesman for ArcelorMittal in New York, had no comment beyond the press release.
Prices for iron ore and coking coal have surged this year because of demand from China, the largest steel producer. The cost of iron ore almost doubled in the April quarter and gained more than 20 percent in the June-to-September period.
ArcelorMittal said in September it planned to spend $4 billion to increase iron-ore production to 100 million metric tons a year by 2015.
The Mary River deposit, which holds reserves of 365 million metric tons of iron ore, is located about 620 miles (1,000 kilometers) northwest of Iqaluit, the capital of Nunavut, the largest of Canada’s three northern territories.
Gordon McCreary, the former Baffinland chairman who is seeking an outside bid from a Chinese company, said last week that discussions with a state-owned company are in an “advanced state.” He resigned from Baffinland’s board in November over its acceptance of ArcelorMittal’s first offer, which he considered too low.
Courtsey news via Bloomerg by the reporter Natalie Doss in New York at ndoss@bloomberg.net.
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