ArcelorMittal Announces Recommended All Cash Offer To Acquire Baffinland Iron Mines Corporation
9:55am EST

ArcelorMittal announced that it has entered into a support agreement with Baffinland Iron Mines Corporation (Baffinland) pursuant to which ArcelorMittal has agreed to make an offer to acquire all of Baffinland’s issued and outstanding common shares and all outstanding common share purchase warrants governed by the warrant indenture dated January 31, 2007 by way of a take-over bid. Under the Offer, holders of Common Shares will receive CAD1.10 in cash per Common Share, and holders of 2007 Warrants will receive CAD0.10 in cash per 2007 Warrant. The Offer, which values Baffinland’s equity at CAD433 million on a fully-diluted basis, represents a premium of 15.8% to Baffinland’s closing share price of CAD0.95 on Toronto Stock Exchange on November 05, 2010 and a premium of 86.4% to Baffinland’s volume weighted average price of CAD0.59 on TSX for 20 trading days prior to the announcement of the unsolicited bid for Baffinland by Nunavut Iron Ore Acquisition Inc. on September 22, 2010. Baffinland’s shareholder, Resource Capital Funds, has also 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 23% of the outstanding Common Shares, to the Offer. The Support Agreement 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 CAD11 million in certain circumstances.