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ArcelorMittal Mails Offer, Circulars to Baffinland for Takeover
11/15/2010 - ArcelorMittal has mailed to Baffinland Iron Mines Corp. security holders its offer and takeover bid circular and Baffinland's directors' circular in connection with the previously announced supported takeover bid to be made by ArcelorMittal for all of Baffinland's outstanding common shares and all outstanding common share purchase warrants issued pursuant to a warrant indenture dated January 31, 2007.
ArcelorMittal has mailed to Baffinland Iron Mines Corp. security holders its offer and takeover bid circular and Baffinland's directors' circular in connection with the previously announced supported takeover bid to be made by ArcelorMittal for all of Baffinland's outstanding common shares and all outstanding common share purchase warrants issued pursuant to a warrant indenture dated January 31, 2007.
Under the offer, holders of common shares will receive C$1.10 in cash per share and holders of 2007 warrants will receive C$0.10 in cash per warrant.
The offer, which values Baffinland's equity at C$433 million on a fully-diluted basis, represents a premium of 37.5% to Nunavut Iron Ore Acquisition Inc.'s September 22, 2010, unsolicited offer of C$0.80 per common share, a premium of 15.8% to Baffinland's closing share price of C$0.95 on the Toronto Stock Exchange (TSX) on November 5, 2010, and a premium of 86.4% to Baffinland's volume weighted average price of C$0.59 on the TSX for the 20 trading days prior to the announcement of the unsolicited bid for Baffinland by Nunavut Iron Ore Acquisition Inc.
The board of directors of Baffinland has approved the offer and unanimously recommends that Baffinland's shareholders and the holders of 2007 warrants tender their common shares and 2007 warrants to the offer.
Baffinland's largest shareholder, Resource Capital Funds, has entered into a lock-up agreement with ArcelorMittal pursuant to which it has agreed to tender 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 has agreed to tender all common Shares and 2007 warrants held by them, representing a further approximately 2.4% of the outstanding shares, to the offer pursuant to lock-up agreements with ArcelorMittal.
As previously announced, a Support Agreement dated November 8, 2010, entered into by ArcelorMittal and Baffinland includes a non-solicitation covenant, a right by ArcelorMittal to match any unsolicited superior proposal, and payment by Baffinland to ArcelorMittal of a break fee of C$11 million in certain circumstances.
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 leading steel company, with operations in more than 60 countries. The company is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. In 2009, ArcelorMittal had revenues of $65.1 billion and crude steel production of 73.2 million tonnes, representing approximately 8% of world steel output.
Baffinland is a Canadian publicly traded junior mining company that is focused on its wholly-owned Mary River iron ore deposits located on Baffin Island, Nunavut Territory, Canada. Baffinland's shares trade on the Toronto Stock Exchange under the trading symbol BIM.
