December 7, 2009 / 2:20 PM / 9 years ago

UPDATE 1-Cliffs, Noront spar over Freewest assets

* Cliffs, Freewest say Noront bid “grossly overstated”

* Cliffs says Noront’s claims are misleading

TORONTO, Dec 7 (Reuters) - The battle to acquire exploration company Freewest Resources FWR.V and its chromite assets in northern Ontario escalated further on Monday, with Cliffs Natural Resources (CLF.N) accusing rival bidder Noront Resources (NOT.V) of issuing false and misleading claims.

Last month, Noront boosted its offer to buy fellow Canadian miner Freewest, attempting to top a rival bid from U.S.-based Cliffs Natural Resources.

Noront said its offer of two shares and one purchase warrant for every seven Freewest shares is worth about C$222 million ($210 million). Cliffs’ friendly offer values Freewest at about C$211 million.

Both Freewest and Cliffs dispute Noront’s claim that its offer is worth C$0.86 per Freewest share. The two companies also allege that Noront’s official filings with Canadian regulators omit certain claims that the company made in its press release.

“Noront has grossly overstated the value of its bid by, among other things, using inappropriately aggressive assumptions to value the warrant component of its offer,” Cliffs said in a statement.

Freewest’s board has unanimously recommended that shareholders not tender their shares to the Noront offer and vote in favor of a deal with Cliffs at a special meeting of shareholders that will be held next month.

Last week, Noront said the Cliffs offer continues to be highly conditional, while its own offer is unconditional.

Chromite is an essential raw material for the production of chromium, which is used in the production of stainless steel. Cliffs produces iron ore pellets and coal for steel makers. (Reporting by Euan Rocha, editing by Dave Zimmerman)

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