Nunavut trumps Arcelor with new Baffinland bid
By Pav Jordan
TORONTO (Reuters) - Nunavut Iron, backed by a U.S. private equity firm, raised its hostile takeover bid for Baffinland Iron Mines by 69 percent on Thursday as it wrestles steel giant ArcelorMittal for an iron ore deposit estimated to be big enough to supply all of Europe.
Nunavut raised its offer to C$1.35 a share, easily topping a friendly C$1.10 per share offer from Arcelor, the world's largest steelmaker.
Nunavut, a wholly owned subsidiary of Iron Ore Holdings LP, was incorporated in Canada in August specifically for the purpose of bidding for Baffinland. Parent Iron Ore Holdings LP was incorporated in the United States for the same purpose. Both are backed by private equity firm the Energy and Minerals Group.
Baffinland is a Toronto-based junior mining explorer that is sitting on enough iron ore to supply all of Europe in its Mary River project on Baffin Island in the infrastructure-poor Canadian Arctic territory of Nunavut.
Baffinland shares were the most heavily traded on the Toronto Stock Exchange on Thursday on volume more than three times higher than the second most traded stock. The price, however, was static at about C$1.28 a share, a rise of only 3.23 percent.
ArcelorMittal said Nunavut's bid was not actually worth more to investors. In its new offer, Nunavut cut the percentage of Baffinland shares it would require to complete a deal to 50.1 percent from two-thirds. Arcelor is bidding for two-thirds of the shares.
"We are aware of Nunavut's revised hostile offer, which is a partial bid and does not constitute a superior offer under the terms of the support agreement," said an Arcelor spokesman.
Baffinland stock has traded slightly above Arcelor offer for the past month as investors bet a higher takeover bid might materialize. Continued...