ArcelorMittal and Nunavut Iron Ore Acquisition Inc. ("Nunavut Iron") today announced that Nunavut Iron has joined ArcelorMittal as joint offeror under the ArcelorMittal offer (the "ArcelorMittal Offer") in order to provide Baffinland shareholders with a substantially improved offer of C$1.50 in cash for 100% of Baffinland's outstanding common shares ("Common Shares").
The ArcelorMittal Offer is also for all of Baffinland's Common Share purchase warrants issued 31 January 2007 (the "2007 Warrants") 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 24 January 2011 ("Expiry Time").
The increased offer price of C$1.50 per Common Share under the ArcelorMittal Offer 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 and Nunavut Iron will own 70% and 30% of Baffinland respectively upon successful completion of the ArcelorMittal Offer and if a second step acquisition transaction is completed.
Peter Kukielski, Head of Mining and Member of the Group Management Board of ArcelorMittal said: "Together with Nunavut Iron, we are providing a more attractive offer to Baffinland shareholders than either of us were prepared to provide on our own. Our joint offer provides shareholders outstanding value and provides certainty to all Baffinland shareholders."
Bruce Walter, Chairman of Nunavut Iron said "We are pleased to be joining together with ArcelorMittal on this venture. The Energy and Minerals Group and Nunavut Iron look forward to working with ArcelorMittal to successfully develop the Mary River project for the benefit of all stakeholders."
Nunavut Iron advises Baffinland shareholders who have tendered to its bid to withdraw their shares and tender them to the ArcelorMittal Offer.
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).
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 announced by ArcelorMittal on 13 December 2010 continue to apply in respect of the revised ArcelorMittal Offer.
The notice of variation and extension in respect of the amendment and extension of the ArcelorMittal Offer will be mailed to registered holders of Baffinland Common Shares and 2007.