ArcelorMittal SA to buy Canadian miner

9 November 2010

The board of directors of Canada’s Baffinland Iron Mines Corporation has approved ArcelorMittal SA’s all-cash offer to take over the company, ArcelorMittal South Africa said on Monday.

Baffinland is a Canadian junior mining company focused on the exploration and development of the iron ore deposits located on its 100 percent-owned Mary River property.

The property has 365-million tonnes of proven and probable reserves grading 64.7 percent iron and 500-million tonnes of additional resources (52-million tonnes of measured and indicated resource grading 64.6 percent iron, and 448-million tonnes of inferred resource grading 65.5 percent iron), as reported by Baffinland.

ArcelorMittal SA has offered to acquire all of Baffinland’s issued and outstanding common shares, and all outstanding common share purchase warrants governed by the warrant indenture dated 31 January 2007 by way of a take-over bid, it said in a statement.

Under the offer, holders of common shares would receive CAN$1.10 in cash per share, and holders of 2007 warrants would receive CAN$0.10 in cash per 2007 warrant.

The offer, which valued Baffinland’s equity at CAN$433-million on a fully-diluted basis, represented a premium of 15.8 percent to Baffinland’s closing share price of CAN$0.95 on the Toronto Stock Exchange (TSX) on 5 November 2010.

“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,” ArcelorMittal SA said.

In addition, each of the directors and officers of Baffinland had agreed to tender all common shares and 2007 warrants held by them to the offer pursuant to lock-up agreements with ArcelorMittal.

Baffinland’s largest shareholder, Resource Capital Funds, had also entered into a lock-up agreement with ArcelorMittal pursuant to which it had agreed to tender all of its common shares and 2007 warrants, representing approximately 23 percent of the outstanding common shares, to the offer, ArcelorMittal said.

Sapa