ArcelorMittal and Baffinland Announce Mailing of ArcelorMittal Offer and Take-Over Bid Circular and Baffinland Directors' Circular
Luxembourg, 13 November 2010 - ArcelorMittal and Baffinland Iron Mines Corporation ("Baffinland") today announced the mailing to Baffinland securityholders of ArcelorMittal's offer and take-over bid circular and Baffinland's directors' circular in connection with the previously announced supported take-over bid to be made by ArcelorMittal (the "Offer") for all of Baffinland's outstanding common shares (the "Common Shares") and all outstanding common share purchase warrants issued pursuant to a warrant indenture dated 31 January 2007 (the "2007 Warrants").
Under the Offer, holders of Common Shares will receive C$1.10 in cash per share and holders of 2007 Warrants will receive C$0.10 in cash per warrant.
The Offer, which values Baffinland's equity at C$433 million on a fully-diluted basis, represents a premium of 37.5% to Nunavut Iron Ore Acquisition Inc.'s 22 September 2010 unsolicited offer of C$0.80 per common share, a premium of 15.8% to Baffinland's closing share price of C$0.95 on the Toronto Stock Exchange (the "TSX") on 5 November 2010 and a premium of 86.4% to Baffinland's volume weighted average price of C$0.59 on the TSX for the 20 trading days prior to the announcement of the unsolicited bid for Baffinland by Nunavut Iron Ore Acquisition Inc.
The board of directors of Baffinland has approved the Offer and unanimously recommends that Baffinland's shareholders and the holders of 2007 Warrants tender their Common Shares and 2007 Warrants to the Offer.
Baffinland's largest shareholder, Resource Capital Funds, has entered into a lock-up agreement with ArcelorMittal pursuant to which it has agreed to tender all of its Common Shares and 2007 Warrants, representing approximately 22.5% of the outstanding Common Shares (on a fully diluted basis), to the Offer. In addition, each of the directors and officers of Baffinland has agreed to tender all Common Shares and 2007 Warrants held by them, representing a further approximately 2.4% of the outstanding Common Shares (on a fully diluted basis), to the Offer pursuant to lock-up agreements with ArcelorMittal.
As previously announced, a Support Agreement dated November 8, 2010 entered into by ArcelorMittal and Baffinland includes a non-solicitation covenant, a right by ArcelorMittal to match any unsolicited superior proposal and payment by Baffinland to ArcelorMittal of a break fee of C$11 million in certain circumstances.
Full details of the Offer are included in the take-over bid circular mailed today to Baffinland security holders. The Offer will expire at 11:59 p.m. (Toronto time) on December 20, 2010, unless otherwise extended or withdrawn, and is subject to a number of customary conditions, including: (i) there being deposited under the Offer and not withdrawn at the expiry time of the Offer such number of Baffinland Common Shares that represent at least 66 2/3% of the Common Shares calculated on a fully-diluted basis, and (ii) the receipt of all necessary regulatory approvals.
ArcelorMittal has retained Georgeson Shareholder Communications Canada Inc. as information agent in connection with the Offer. Computershare Investor Services Inc. is the depositary for the Offer.