Rivals unite in Baffinland bid but chairman opposes
By Pav Jordan and Philip Blenkinsop
TORONTO/BRUSSELS (Reuters) - Rival bidders for Baffinland Iron Mines have united in a C$590 million ($595 million) joint takeover offer, but the iron ore explorer's chairman said he opposes the deal.
ArcelorMittal, the world's largest steelmaker, and Nunavut Iron, backed by U.S. private equity, on Friday made a joint C$1.50-a-share offer for 100 percent of Baffinland, ending their four-month battle for the company's huge Arctic iron ore deposit.
Baffinland shares rose nearly 3 percent to C$1.56, suggesting shareholders may not tender to the C$1.50 price.
Under the agreement, ArcelorMittal will buy all outstanding shares of Baffinland, but will end up owning 70 percent. Nunavut's ownership, currently about 10.3 percent, will nearly triple to 30 percent.
"The respective parties were killing themselves without end-game in sight, and so both parties very much wanted the asset, and this is a splitting of the spoils so to speak," said a source with direct knowledge of the offers.
The battle for Baffinland's Mary River project has underscored the global race for resources as China, India and other emerging countries build roads, bridges and housing to meet the needs of their growing and more affluent populations.
Mary River, on remote Baffin Island in the Canadian Arctic, will produce enough high-grade iron ore to supply all of Europe for years, and is seen displacing other dominant producers due to its proximity to the continent.
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