ArcelorMittal SA said on Friday it raised its offer for Canada’s Baffinland Iron Mines Corp to counter an unsolicited bid from Nunavut Iron Ore Acquisition Inc.
Luxembourg-based steel maker ArcelorMittal said it was offering C$1.40 per share, or about US$551 million, for Baffinland.
That would match the per-share price of a revised offer this week from Nunavut.
ArcelorMittal said its bid was a better deal for Baffinland shareholders because it was seeking to buy all of the company’s shares while Nunavut wanted only about 60 percent of the shares.
Nunavut already owns about 10.5 percent of Baffinland stock.
Peter Kukielski, ArcelorMittal’s head of mining, said his company’s offer “provides demonstrably superior value and certainty for Baffinland shareholders.”
He said stockholders would be left with thinly traded minority shares if the Nunavut bid succeeded.
ArcelorMittal said Baffinland’s largest shareholder, Resource Capital Funds, has tendered its 22.5 percent stake to the ArcelorMittal offer.
Nunavut made an unsolicited offer for Baffinland in September. In November, Baffinland and ArcelorMittal agreed on a deal for C$1.10 per share, or C$433 million (US$434.8 million), as ArcelorMittal sought to build up its iron ore reserves. The deal included the right of ArcelorMittal to match any unsolicited offer.
Steel producers are worried about sudden price changes after the world’s three biggest iron ore suppliers decided this year to price contracts on a quarterly basis instead of an annual one.
Baffinland mines iron ore from its Mary River property in Nunavut Territory in northwestern Canada.
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