VUT Iron Ore said yesterday it would boost its offer for Baffinland Iron Mines to C$1.45 in cash per share, plus one exchange right per common share, aiming to thwart a competing bid by ArcelorMittal.
The company, backed by a private equity fund, also extended its offer to 25 January, after signalling it would do so last week. The offer, which valued the company at C$570m ($570m), had been scheduled to expire yesterday.
Since September, Nunavut has been in a bidding war with steelmaker Arcelor to gain control of Baffinland and its iron ore deposit in the Canadian Arctic.
ArcelorMittal’s C$1.40 per share bid for 100 per cent of the company was set to expire yesterday.
Under the revised Nunavut bid, each exchange right would give shareholder 0.4 per cent of a share purchase warrant. Each whole warrant would entitle the holder to purchase one common share at a price equal to the greater of C$1.40, or the market price at the time of the warrant issue, within three years.
Nunavut said that if the warrants could not be issued, the exchange rights would be worth 8 Canadian cents each.
Analysts said the latest move by Nunavut could drag the saga on past ArcelorMittal’s deadline last night.
“I can see how people might require additional time to fully appreciate the value of this offer that Nunavut has put on the table,” said Jennings Capital analyst Peter Campbell.
ArcelorMittal said Nunavut’s improved offer merely meant that its offer was now in compliance with regulatory requirements and that it would not increase its own offer or extend the deadline.
“We believe that our bid remains superior to their partial bid,” said ArcelorMittal spokesman.