TORONTO (Reuters) - The winner of the battle for control of Baffinland Iron Mines may not be known for days after Nunavut Iron Ore and ArcelorMittal on Monday extended the deadlines on their competing bids.
The two companies have been caught up in a bidding war for Baffinland since September, eager to gain control of its vast iron ore deposit in the Canadian Arctic.
Nunavut Iron Ore said early in the day that it was sweetening its offer, adding one exchange right per common share to a bid worth C$1.45 a share in cash for 60 percent of Baffinland.
Nunavut, backed by a private equity fund, also extended its offer to January 25, after signaling it would do so last week. The offer, which valued the company at C$570 million ($570 million), had been scheduled to expire on Monday.
Later, Luxembourg-based ArcelorMittal, the world’s largest steel company, said it would extend its C$1.40-a-share bid to January 21.
The announcement came hours before the 11:59 a.m. (0459 GMT Tuesday) deadline. Arcelor’s bid values Baffinland at C$550 million but the steelmaker has agreed to buy 100 percent of the company.
Under the revised Nunavut bid, each exchange right would give shareholder 0.4 percent of a share purchase warrant. Each whole warrant would entitle the holder to purchase one common share at a price equal to the greater of C$1.40, or the market price at the time of the warrant issue, within three years.
Nunavut said that if the warrants could not be issued, the exchange rights would be worth 8 Canadian cents each.
“They’ve certainly complicated matters, and they’ve done so very late in the game,” said Jennings Capital analyst Peter Campbell. “I think that they’re applying pressure here.”
“I can see how people might require additional time to fully appreciate the value of this offer that Nunavut has put on the table.” he said.
Baffinland shares closed up 1.41 percent to C$1.44 a share on Monday on the Toronto Stock Exchange, above the Arcelor bid but below Nunavut’s offer of C$1.45 a share.
“We believe that our bid remains superior to their partial bid,” ArcelorMittal spokesman Giles Read told Reuters.
ArcelorMittal said Nunavut’s improved offer merely meant that its offer was now in compliance with regulatory requirements.
Nunavut currently owns about 10 percent of Baffinland shares. The board has recommended that shareholders tender to the ArcelorMittal offer and the steelmaker has lock-up agreements with holders of 25 percent of the stock.
Additional reporting by Robert-Jan Bartunek in Brussels; Editing by Frank McGurty