(Adds stake details in paragraph 2. Updates with analyst
comments in paragraphs 6-7. Updates trading activity.)
Nunavut Iron Ore Acquisition Inc. has again sweetened its bid
for a controlling stake in Baffinland Iron Mines Corp. (BIM.T),
this time to C$1.40 a share for a 60% stake.
That offer compares with its most recent offer of C$1.35 a share
for a 50.1% stake in the junior miner. Nunavut Iron Ore already
controls 40.7 million Baffinland shares, or about a 10% stake.
Nunavut Iron Ore, which is owned by Iron Ore Holdings LP, a
limited partnership controlled by Bruce Walter, Jowdat Waheed and
funds managed by Energy Minerals Group, is locked in a takeover
battle with steel giant ArcelorMittal (MT) for Baffinland, whose
Mary River iron-ore property in Canada's Nunavut Territory is a
number of years away from production.
Nunavut Iron Ore launched the bidding in September with an
80-Canadian-cent a share hostile bid for all of Baffinland, which
the target company rejected. Baffinland instead agreed to a
C$1.10-a-share offer from ArcelorMittal, later boosted to C$1.25 a
share.
ArcelorMittal is seeking to expand its iron-ore output to become
more self-sufficient.
In a research note Wednesday, Raymond James analyst Tom Meyer
said he recommends that Baffinland shareholders tender to
ArcelorMittal's bid, saying the nature of the steel giant's bid -
100% control - is superior to Nunavut Iron Ore's partial offer.
He believes continued ownership under Nunavut Iron Ore "will be
subject to further share dilution, technical risk, project delays,
capital cost inflation" and other factors.
Nunavut Iron Ore also said Wednesday that it has extended its
offer to Jan. 10 from Dec. 30.
At midday Wednesday in Toronto, Baffinland is trading at C$1.33,
down 1 Canadian cent, on volume of 6.1 million shares. The stock
closed at 56 Canadian cents on Sept. 21, the day before Nunavut
Iron Ore announced its initial offer.
-By Carolyn King, Dow Jones Newswires; 416-306-2100;
carolyn.m.king@dowjones.com