Cliffs Amends Definitive Agreement to Acquire Freewest
12/07/2009 - Cliffs Natural Resources has amended the terms of the previously disclosed definitive agreement to acquire Freewest Resources Canada Inc. Under the terms of the amended agreement, each Freewest shareholder will now receive CAD$0.90 per share of fixed consideration exclusively in the form of Cliffs common stock.
Cliffs Natural Resources Inc. recently announced that it has amended the terms of the definitive agreement disclosed on November 23 to acquire Montreal-based Freewest Resources Canada Inc.
Under the terms of the amended agreement, each Freewest shareholder will now receive CAD$0.90 per share of fixed consideration exclusively in the form of Cliffs common stock. The fraction of a Cliffs share to be issued per Freewest share is variable and will be determined based on the volume weighted average price of Cliffs shares for the five trading days ending on the third trading day before the effective date of the transaction.
“Our revised offer provides superior and immediate value, liquidity, and certainty for Freewest shareholders," said Joseph Carrabba, President, Chairman and CEO of Cliffs. "Cliffs has the experience and financial resources necessary to bring these world-class deposits into production. This offer gives Freewest shareholders the option to monetize their investment through a stable, liquid currency or to participate in the continued growth of Cliffs.
“It is important for Freewest shareholders to know that as a result of our involvement over the past year, Cliffs has a thorough technical understanding of the chromite assets in the Ring of Fire,” Carrabba added. “Cliffs firmly believes that Freewest’s chromite properties provide sufficient size and scale, on their own, for the development of a world-class chromite mine.”
Cliffs currently owns about 12.4% of Freewest Resources. Freewest’s Board unanimously supports the amended definitive agreement and recommends that all shareholders accept Cliffs’ offer. This recommendation is also supported by a Fairness Opinion from Freewest's financial advisor.
The transaction is expected to close in the first quarter of 2010, subject to a number of customary conditions including approval by Freewest shareholders and consent of the court.
Cliffs Natural Resources, an international mining and natural resources company, is the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia, and a significant producer of metallurgical coal. The company is organized through three geographic business units: The North American business unit is comprised of six iron ore mines owned or managed in Michigan, Minnesota, and Eastern Canada, and two coking coal mining complexes located in West Virginia and Alabama. The Asia Pacific business unit is comprised of two iron ore mining complexes in Western Australia and a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. The South American business unit includes a 30% interest in the Amapá Project, an iron ore project in the state of Amapá in Brazil.
