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ArcelorMittal and Nunavut Iron Join to Upgrade Offer for Baffinland Common Shares

01/17/2011 - Nunavut Iron Ore Acquisition Inc. has joined as joint offeror under the ArcelorMittal offer in order to provide Baffinland shareholders with an improved offer of C$1.50 in cash for 100% of Baffinland's outstanding common shares. The offer is also for all of Baffinland's common share purchase warrants issued 31 January 2007 at a price of $0.10 per warrant.

Nunavut Iron Ore Acquisition Inc. has joined ArcelorMittal as joint offeror under the ArcelorMittal offer in order to provide Baffinland shareholders with an improved offer of C$1.50 in cash for 100% of Baffinland's outstanding common shares.

The all-cash offer for 100% of Baffinland's Common Shares and 2007 Warrants remains subject to the same conditions, except that the revised ArcelorMittal Offer is subject to an increased minimum tender condition of at least 66 2/3% of the common shares calculated on an in-the-money fully diluted basis (including common shares held by the joint offerors). The deadline for acceptance of the revised offer has been extended until midnight on January 24.
The ArcelorMittal Offer is also for all of Baffinland's Common Share purchase warrants issued 31 January 2007 at a price of $0.10 per warrant. The time for acceptance of the ArcelorMittal Offer has been extended until 11:59 p.m. (Toronto time) on January 24, 2011.

 
The increased offer price of C$1.50 per Common Share represents a premium of approximately 36% to the original ArcelorMittal Offer price of C$1.10 per common share, and a premium of 168% to the trading price of the common shares prior to Nunavut Iron's original unsolicited offer in September 2010.
 
Nunavut Iron and ArcelorMittal have entered into an agreement as to their respective interests and obligations under the ArcelorMittal Offer and for the development of the Mary River Property upon completion of their acquisition of Baffinland. Under the agreement, ArcelorMittal will own 70% of Baffinland and Nunavut Iron will own 30%, upon successful completion of the ArcelorMittal Offer and if a second-step acquisition transaction is completed.
 
Nunavut Iron advises Baffinland shareholders who have tendered to its bid to withdraw their shares and tender them to the ArcelorMittal Offer.
 
Nunavut Iron and its affiliates hold 40,721,400 common shares, representing in the aggregate approximately 10.3% of the outstanding common shares on an in-the-money fully-diluted basis. As previously announced, ArcelorMittal has entered into a lock-up agreement with Baffinland's largest shareholder, Resource Capital Funds, pursuant to which RCF has tendered all of its common shares and 2007 Warrants, representing approximately 22.5% of the outstanding common shares (on a fully diluted basis), to the Offer. In addition, each of the directors and officers of Baffinland have tendered all common shares and 2007 Warrants held by them, representing a further approximately 2.4% of the outstanding common shares (on a fully diluted basis), to the Offer pursuant to lock-up agreements with ArcelorMittal.
 
The regulatory approvals previously announced by ArcelorMittal continue to apply in respect of the revised offer.
 
ArcelorMittal has retained Georgeson Shareholder Communications Canada Inc. as information agent in connection with the Offer. Computershare Investor Services Inc. is the depositary for the Offer.
 
ArcelorMittal is the world's largest steel company, with operations in more than 60 countries, with leadership in major global steel markets, leading R&D and technology, sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries spanning four continents, the Company covers all of the key steel markets, from emerging to mature.
 
In 2009, ArcelorMittal had revenues of $65.1 billion and crude steel production of 73.2 million tonnes, representing approximately 8 per cent of world steel output.