ArcelorMittal raises bid for Canada's iron ore miner Baffinland to C$492 million

Steel giant ArcelorMittal said on Saturday has raised its cash offer to acquire the Canadian iron ore miner to C$1.25 a share from its previous offer of C$1.10 a share and said it has the support of Baffinland Iron Mines Corp's board for the bid.

The amended offer from the world's largest producer of steel came after Nunavut Iron Ore last week raised its hostile bid for Baffinland to $1.35 a share in cash from its September 2010 offer of 80 cents per share. (See: PE firm launches hostile bid for Canada's Baffinland Iron Mines)

Last month, ArcelorMittal launched a C$1.10 a share or C$433 million friendly takeover bid for Baffinland, which was accepted by the miner's board and its largest shareholder, Resource Capital Funds, under a "lock-up agreement."

Resource Capital Funds and the directors of Baffinland had also agreed to sell their 25 per cent stake exclusively to ArcelorMittal.

ArcelorMittal's latest offer values the Toronto-based Baffinland at C$492 million, representing a premium of 14 per cent to its original bid of C$433 million.

Luxembourg-based ArcelorMittal said it has lowered the minimum acceptance condition in its amended offer to 50 per cent plus one common share, and also extended the bid until 29 December 2010.