ArcelorMittal Says No Intention To Extend Baffinland Offer
December 22 2010 - 4:28PM
Dow Jones News
Steel titan ArcelorMittal (MT, MT.AE) said Wednesday it is
keeping to its Baffinland Iron Mines Corp. (BIMGF, BIM.T) offer
deadline rather than delaying the process to the new year as
requested by Canadian regulatory authorities.
ArcelorMittal said it has "no intention" of extending its offer
beyond Dec. 29 and said it believes its bid will be successful
because its C$1.25 a share offer for all of Baffinland's shares is
"superior" to Nunavut Iron Ore Acquisition Inc.'s offer of C$1.35 a
share for 39.8% of Baffinland's shares.
Nunavut is a wholly owned subsidiary of Iron Ore Holdings LP
(IRNHF, IOH.AU), which in turn is backed by the Energy Minerals
Group, a U.S. private equity firm. Nunavut is seeking to gain
majority control of Baffinland by increasing its stake to 50.1%
from 10.3%.
The world's largest steelmaker said it has asked Baffinland to
waive an adopted shareholders' rights plan in order to allow its
offer to go ahead. The rights plan would in any case "cease" if
ArcelorMittal failed to extend its offer until mid-January,
according to the Ontario Securities Commission.
Baffinland adopted the shareholders' rights plan to protect
itself from any company's creeping in and building a significant
stake in the company.
Nunavut recently complained to the Ontario Securities Commission
about the adopted shareholders' rights plan. The Ontario Securities
Commission agreed to hear the case, but only in the new year, and
asked that both companies extend their offer until then so that the
hearing could be completed.
ArcelorMittal said it believes its own bid is superior to
Nunavut's bid because its provides Baffinland shareholders with
certainty of value whereas Nunavut's offer doesn't.
The Luxembourg steelmaker said the value of Nunavut's partial
offer was "highly uncertain" because the Nunavut only promised to
purchase a portion of the shares (if all of them were tendered),
leaving a large number of Baffinland shareholders wondering how to
value their residual minority shareholding in the aftermath of such
a deal.
-By Alex MacDonald, Dow Jones Newswires; +44 (0)7776 200 924;
alex.macdonald@dowjones.com
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