Arcelor, partner in virtual takeover of iron-ore giant | business | Hindustan Times
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Arcelor, partner in virtual takeover of iron-ore giant

business Updated: Feb 19, 2011 14:04 IST
IANS
Baffinland Iron Mines Corporation

With their final offer of buying the remaining common shares expiring on Thursday, ArcelorMittal and Nunavut Iron Ore Acquisition have almost acquired total control of Toronto-based Baffinland Iron Mines Corporation.

In a statement Friday, the two joint owners said they now control 93 percent stake of iron-ore rich Baffinland. The over 90 percent stake allows them to force the remaining shareholders to surrender their stake.

A shareholder vote will be taken to approve the forced purchase of the remaining shares not tendered by Thursday.

While ArcelorMittal controls 70 percent of the stake, the remaining 30 percent goes to Nunavat Iron Ore Acquisition which is controlled by the US-based investment firm Energy and Mineral Group.

The Luxembourg-based steel giant and Nunavut acquired Baffinland last month for $590 million at the rate of $1.50 per share.

Holding about 60 percent of Baffinland stock at the time of their takeover, the two partners announced their offer to acquire additional common shares with the Feb 7 deadline to take their stake past the threshold of 90 percent.

But as they couldn't cross the threshold by the deadline, the joint owners extended their deadline till February 17 for mopping up the remaining common shares.

Abandoning their initial rivalry, ArcelorMittal and Nunavut later joined hands to acquire the iron-ore company.

Baffinland attracted ArcelorMittal because it owns 365 million tonnes of iron ore at its Mary River site in Canadian Arctic.

Once the Mary River project is completed at a cost of $4 billion, it is expected to yield up to 18 million tonnes of iron ore annually for up to two decades, say experts.

According to investment bank Jennings Capital Inc. the Mary River project is "the best undeveloped iron ore deposit in the world."

Aditya Mittal was appointed the new chairman of Baffinland last month.