ArcelorMittal Offers $433 Million for Baffinland Iron Mine

By Joel ScanlonNov 10 2010

ArcelorMittal has offered $433 million to Baffinland Iron in a deal which is favourably viewed by both the board and major shareholders.

The Mary River iron ore deposits on Baffin Island in the Eastern Arctic are the reason that the world’s largest steelmaker is bidding for the company.

The last minute bid values the shares of Baffinland Iron Mines Corp at $1.10 cash and 10 cents for each warrant. The company’s South African subsidiary will be sending in a detailed offer to the shareholders of Baffinland Iron by November 16, 2010. That would be a mere formality in the takeover as the bid already has the blessings of the board and major shareholders of Baffinland Iron.

This takeover bid is being called barely adequate by Tom Meyer who is an analyst with Raymond James. He also said that it was not likely that anyone would try to top the friendly offer from ArcelorMittal South Africa.

The only existing bid is that of Nunavut Iron which has offered 80 cents per share cash for Baffinland Iron. The bid is considered far less attractive by the shareholder of Baffinland Iron and the deal would most likely go the way of ArcelorMittal.