Deal Accepted: ArcelorMittal’s Successful Baffinland Buyout Offer
TOP STORY — ProspectingJournal.com — November 8, 2010 – TORONTO, ON – Director’s of Baffinland Iron Mines Corporation [BIM – TSX] have announced their acceptance of a friendly takeover bid from steel giant ArcellorMittal [MT – NYSE] for $433 million. While the company’s management is urging its shareholders to accept the deal at a price of $1.10/share and $0.10 per warrant issued on January 31.
Expected to pass the net benefit test issued by the federal government under the Investment Canada Act, the deal follows the rejection of an earlier unsolicited offer which was reiterated publicly on October 28 from Nunavut Iron Ore Acquisition Inc. which valued the Baffinland shares at $0.80. Though $1.10 price point falls far short of Baffinland management’s initial valuation of $3.00/share, it is a 37.5% increase in value over the Nunavut offer.
Upon announcement of the deal, the price represented a 15.8% premium over the initial market price of $0.95/share upon the closing of the November 5, 2010 trading day. The news of the deal has immediately bumped up the price of the Baffinland shares, as at the time of publication the price held at $1.13/share.
“The ArcelorMittal Offer delivers a significant premium to Baffinland shareholders over the unsolicited offer that was made previously,” said John Lydall, Baffinland’s Chair of the Special Committee of the Board. “Following a thorough review of alternatives to maximize shareholder value, the Baffinland Board of Directors unanimously recommends that Baffinland shareholders tender their shares to the ArcelorMittal Offer.”
Full details of the bid will be included in a takeover bid circular to be mailed out to shareholders in the near future. A conference call and webcast will be delivered tomorrow at 10:30 (EST) via the following link.
Also announced today by Baffinland is the resignation of Director Gordon A. McCreary. Up until March 2010, McCreary served as President and CEO of Baffinland.
“On behalf of the board of directors of Baffinland, I would like to thank Gord for his tireless efforts and dedication to the Company and its Mary River Project,” said Richard (Bo) McCloskey, Chairman of Baffinland. “Gord was instrumental in laying the foundation towards the advancement of the Mary River Property to development.”