Now ArcelorMittal joins rival in joint bid for Canadian ore co.

TORONTO - In a strange twist to its fierce battle to acquire Toronto-based Baffinland Iron Mines Corporation, ArcelorMittal Friday joined hands with rival Nunavut Iron Ore Acquisition Inc. to make a joint bid for the Canadian iron ore company.

Burying their rivalry which started in September, ArcelorMittal and Nunavat Friday made peace with a joint bid for Baffinland at $1.50 per per share. If Baffinland accepts the joint bid, ArcelorMittal will get 70 percent and Nunavat 30 percent stake in the company. It has till January 24 to accept the offer.

Friday’s joint offer is higher than the individual offers made by ArcelorMittal and Nunavat. ArcelorMittal’s individual offer of $1.40 a share - or $550.7 million - for 100 percent control of Baffinland was to expire Jan 21.

On the other hand, Nuvavat’s individual offer of $1.45 per share - or $570 million - for 60 percent control of Baffinland expires Jan 25. Nunavat, which is a subsidiary of the US Energy and Minerals Group, already owns 10 percent stake in Baffinland.

At $593 million, the joint offer by ArcelorMittal and Nunavat is significantly higher than their individual offers.

Since the Baffinland board has opposed to its takeover by Nunavat as that company was floated by its (Baffinland’s) former executive to mount a hostile bid in September, ArcelorMittal’s joining hands with its rival hasn’t reportedly pleased Baffinland chairman and CEO Richard McCloskey.

The Baffinland boss reportedly told Bloomberg News that he won’t back the deal now.

After of months of bitter rivalry, it was Nunavut chairman Bruce Walter who reportedly took the initiative to patch up with ArcelorMittal.

“I don’t think anybody throughout the process had taken any cheap shots. All parties involved understand the difference between the way in which one engages in the takeover bid game and how you want to conduct yourself going forward,” he was quoted as saying in the Canadian media.

The battle for Baffinland began in September when Nunavat offered 80 cents a share for a majority stake in it and ArcelorMittal entered the fray with its offer of $1.10 per share for 100 percent control.

Both eyed Baffinland’s 365 million tonnes of iron ore at its Mary River site in Canadian Arctic.

The Mary River project, which needs $4 billion to complete, can yield up to 18 million tonnes of iron ore annually for up to two decades.

Investment bank Jennings Capital Inc. says the project holds “the best undeveloped iron ore deposit in the world.”

(Gurmukh Singh can be contacted at gurmukh.s@ians.in)