Canadian iron ore miner, Baffinland Iron Ore Mines Corp yesterday said that steel giant ArcelorMittal's C$550-million takeover offer for 100 per cent of the company is better than Nunavut Iron's C$570 million bid for only 60 per cent of Baffinland.
The board of Toronto-based Baffinland has once again recommended that shareholders reject Nunavut's revised offer to acquire only a majority stake and accept ArcelorMittal's bid for all the shares of the company.
Nunavut, formed solely for the acquisition of Baffinland by the $2-billion US-based private equity firm Energy & Minerals Group, had over the New Year sweetened its offer to C$1.45 a share for 60 per cent of Bafinland, valuing the miner at around C$570 million ($570 million).
Energy & Minerals Group holds about 10.5 per cent of Baffinland's shares. Its sweetened offer came in response to ArcelorMittal raising its offer to C$1.40 a share or C$550 million for the whole of Bafinland.
At stake is Baffiinland's 365 million tonnes of undeveloped iron ore reserves at its Mary River project in the high Artic of Canada that will require an investment of C$4 billion to develop.
The board of Baffinland said that after reviewing the amended offer from Nunavut, it has determined that ArcelorMittal's offer remains in the best interests of its shareholders.
This is the third time that both suitors have raised their bids since Nunavut launched a 90 Canadian cents a share or C$274 million hostile bid in September 2010 for Canada's junior iron ore explorer Baffinland.
Baffinland fully owns three mining leases covering approximately 1,600 hectares in the Mary River that is estimated to hold around 500 million tonnes of high-grade iron ore reserves.
According to Baffinland's estimates, Mary River iron ore can produce around 18 million tonnes of 65.5 per cent grade iron ore per year.
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