ArcelorMittal Raises All-Cash Bid For Baffinland

Canada's Baffinland Iron Mines Corp. (BIM.T) said late Saturday that its board has accepted an improved all-cash friendly offer from ArcelorMittal (MT, MT.AE), the world's largest steel producer.

Luxembourg-based ArcelorMittal raised its bid to C$1.25 a share from its original bid of C$1.10, Baffinland said in a statement.

ArcelorMittal's amended offer comes two days after rival Nunavut Iron Ore Acquisition Inc. on Thursday increased its hostile all-cash bid to C$1.35 a share from 80 Canadian cents.

Nunavut said it acquired a total of just over 15 million shares under its hostile cash bid of C$1.35 a share for Toronto-based Baffinland. Nunavut, a wholly owned subsidiary of Iron Ore Holdings LP (IRNHF, IOH.AU), is backed by the Energy Minerals Group, a U.S. private equity firm.

ArcelorMittal's new offer expires at 11:59 p.m. Toronto time on Dec. 29, Baffinland said. Warrant holders will receive 10 Canadian cents for each warrant.

The minimum acceptance condition for the acquisition has been reduced to 50% plus one common share, Baffinland said. The two companies have agreed to increase the breakup fee to C$15.5 million from C$11 million. As well, Baffinland's board has approved the adoption of a new shareholder rights plan, subject to approval of the Toronto Stock Exchange.

ArcelorMittal initially offered C$1.10 a share for Baffinland on Nov. 8.

As reported, ArcelorMittal already has a significant iron-ore presence in Canada and is in the process of expanding its iron ore output to become more self sufficient. Baffinland, meanwhile, wants a strategic partner to help develop its Mary River iron-ore project on Canada's Baffin Island in Nunavut.

-By Caroline Van Hasselt, Dow Jones Newswires; 416-306-2023; [e-mail]