Cleveland-Cliffs to Make Offer for Outstanding Shares in Portman
09/11/2008 - Cleveland-Cliffs announces its intention to make an off-market takeover offer for all remaining shares in Portman Limited as a last and final cash offer with a price of A$21.50 per Portman Share.
Cleveland-Cliffs Inc—soon to be known as Cliffs Natural Resources—announced that it intends to make an off-market takeover offer for all of the shares in Portman Limited that it does not already own. Cliffs will make the offer through its wholly owned subsidiary, Cliffs Asia-Pacific Pty Limited as a last and final cash offer with a price of A$21.50 per Portman Share.
Cliffs already holds approximately 85.19% of the shares in Portman.
Cliffs’ offer has the unanimous support of the independent directors of Portman. In the absence of a superior offer, and subject to an independent expert to be commissioned by Portman concluding that the offer is fair and reasonable, the independent directors of Portman will recommend that Portman shareholders accept the offer.
According to Cliffs, the offer price of A$21.50 cash per Portman Share is its final price and will not be increased during the Offer Period. The offer reflects a premium of approximately 21.5% over Portman Shares’ closing price on ASX on Sept. 10, 2008, and is subject to a number of conditions.
“For Cleveland-Cliffs shareholders, this transaction is designed to enable Cleveland-Cliffs to move to full ownership of Portman,” commented Joseph A. Carrabba, Chairman, President and CEO of Cleveland-Cliffs. “I believe that this final cash offer represents outstanding value for Portman shareholders and provides an excellent opportunity for shareholders to realize value from their investment in Portman.”
“The offer provides a straightforward cash exit for Portman shareholders, and accepting shareholders will not incur brokerage or stamp duty charges,” added Carrabba.
“There is no higher offer,” said Carrabba. “Given that Cliffs already owns 85.19% of the issued and outstanding Portman shares, I believe the likelihood of another bidder emerging is extremely remote. In the event that our offer does not succeed, there is a risk that Portman’s share price may fall significantly,” he concluded.
Cliffs is being advised by Wilson HTM Corporate Finance and Mallesons Stephen Jaques.
Founded in 1847 and headquartered in Cleveland, Ohio, Cleveland-Cliffs is an international mining company, the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal to the global steelmaking industry. Cleveland-Cliffs operates six iron ore mines in Michigan, Minnesota and Eastern Canada, and three coking coal mines in West Virginia and Alabama. In addition, Cleveland-Cliffs has a 30% interest in the Amapá Project, a Brazilian iron ore project, and a 45% economic interest in the Sonoma Project, an Australian coking and thermal coal project. Cleveland-Cliffs employs more than 5000 people worldwide.
