Steel giant ArcelorMittal (MT) announced that 1843208 Ontario Inc. has completed the acquisition of all outstanding securities of Baffinland Mines Corporation, owned by ArcelorMittal (70% stake) and Iron Ore Holdings, LP (30% stake).
The announcement included ArcelorMittal, Nunavut Iron Ore Acquisition Inc. and Baffinland Iron Mines Corporation. Nunavut Iron is wholly owned by Iron Ore Holdings, LP. Further to the acquisition, Baffinland would immediately proceed to delist its securities from the Toronto Stock Exchange.
The acquisition by 1843208 Ontario Inc was completed as per the court approved plan of arrangement. Under the terms of the Arrangement, former Baffinland security holders, other than dissenting shareholders, would receive a cash consideration of C$1.50 per common share. The holders of share purchase warrants issued pursuant to a warrant indenture dated December 10, 2009, would receive C$0.80 per warrant. The holders of share purchase warrants issued pursuant to a warrant indenture dated January 31, 2007, would receive C$0.10 per warrant.
Further, ArcelorMittal South Africa expects arbitration proceedings relating to its stake in Kumba Iron Ore, a unit of Anglo American, Sishen mine to be heard in 2012. The dispute started after Kumba terminated a long-term deal, under which it sold ores to the steelmaker at a discount after ArcelorMittal failed to convert its rights over a 21.4% stake in the Sishen mine into a new right as required by law.
Moreover, ArcelorMittal announced that the initial public offering in a range of $1.5–5 billion by Mongolia’s Erdenes-Tavan Tolgoi will take place either at the end of 2011 or in the first quarter of 2012.
Currently, ArcelorMittal holds a Zacks #3 Rank, which translates into a Hold rating over the short term (1 to 3 months).
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