New bid for Baffinland

Article Excerpt

BAFFINLAND IRON MINES $1.16 (Toronto symbol BIM; SI Rating: Start-up) (416-364-8820;; Shares outstanding: 343.1 million; Market cap: $398.0 million; No dividends paid) has received a friendly $1.10 a share takeover offer from Luxembourg-based Arcelor-Mittal, the world’s largest steelmaker. Baffinland recently rejected a hostile, $0.80-per-share takeover offer from Nunavut Iron Ore Acquisition. Baffinland’s board of directors has recommended that its shareholders accept the $1.10-per-share offer from ArcelorMittal. All of Baffinland’s board members and management have agreed to tender their shares to the offer. As well, Baffinland’s largest shareholder, Resource Capital Funds, has entered into an agreement to tender its 23% stake. Baffinland is now trading at $1.16, or 5.5% above ArcelorMittal’s bid. This indicates that investors expect a higher bid from ArcelorMittal or another buyer. Japan’s Mitsubishi Corp., which already owns just under 5% of Baffinland, could be a potential buyer. As well, German steelmaker ThyssenKrupp could make a bid, as could major global resource companies, such as Vale SA or…

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