TORONTO - Noront Resources Ltd. (TSXV:NOT) says it won't sweeten its takeover bid for Freewest Resources Canada Inc. (TSXV:FWR) despite a superior offer from a Freewest minority shareholder, Cliffs Natural Resources Inc.
The junior resource company said Friday its offer for Freewest, which expires Dec. 11 and has an impled current value of 93.5 cents a share, "is full, fair and final and will not be increased."
However Freewest questioned the value of the Noront offer which includes two Noront shares plus a five-year share-purchase warrant with an exercise price of $4 for every seven Freewest shares.
Freewest suggested the value of the warrant, which was evaluated at 22 cents, may be extremely variable and could be worthless.
Earlier this week, Cliffs (NYSE:CLF) raised its bid to about 90 cents a share, which Freewest says values the company at C$211 million.
Freewest's board unanimously recommended shareholders vote for the deal with Cliffs Natural Resources at the special meeting of shareholders to be held in January.
But Noront said the Cliffs offer "continues to be highly conditional leading to the possibility that the transaction may not close." Noront's offer is unconditional.
Noront is focused on developing its nickel-copper-platinum-palladium, chromite, gold and vanadium discoveries in the so-called Ring of Fire mining district in the James Bay Lowlands of Northern Ontario.
"We urge Freewest Shareholders to tender their shares to our offer, the only offer that will allow continued participation in the Ring of Fire," Noront CEO Wes Hanson said in a release.
"Freewest's shareholders have been abandoned by their board and management and therefore it is up to you, the Freewest shareholder, to decide the future of your company."
Cliffs Natural Resources, an international iron and coal company which lists its shares on public markets in New York and Paris, is already a significant minority shareholder of Freewest.
