Nunavut Iron Opposes Anti-Shareholder Actions of Baffinland Board

  • Nunavut Iron's Offer Remains Superior to Amended ArcelorMittal Offer

  • Baffinland's New Poison Pill and Larger Break Fee Designed to Eliminate Shareholders' Right to Choose

  • Baffinland Shareholders Urged to Act to Protect Their Own Interests

TORONTO, Dec. 19 /CNW/ - Nunavut Iron Ore Acquisition Inc. ("Nunavut Iron") announced today that it will apply to the Ontario Securities Commission tomorrow for an urgent hearing to immediately cease trade the shareholders' rights plan announced by the board of directors of Baffinland Iron Mines Corporation ("Baffinland") on December 18, 2010.

It is clear that the Baffinland board adopted the shareholders' rights plan in order to:

  • favour ArcelorMittal's inferior $1.25 per share offer;

  • deny shareholders the right to choose Nunavut Iron's superior Offer of $1.35 per share for control of Baffinland; and,

  • end the auction process, an outcome which would be to the detriment of all Baffinland shareholders.

"The adoption of this rights plan is intended to be an auction-ending move by the Baffinland board and is not in the best interests of its shareholders," said Bruce Walter, Chairman of Nunavut Iron.  "Unless set aside, the poison pill will prevent shareholders from considering Nunavut Iron's current Offer or any increased offer.  This action is particularly offensive for shareholders when it is clear many in the market have indicated that Nunavut Iron's Offer already delivers greater value than the modest increase to its offer proposed by ArcelorMittal."

The amended ArcelorMittal offer is below the $1.32 per share price of Baffinland on the Toronto Stock Exchange on December 17, 2010.

"We believe that Baffinland shareholders should also be appalled by their Board's $4.5 million increase in the break fee that would be payable to ArcelorMittal, raising it to $15.5 million," Mr. Walter said. "In effect, the Board is using funds that belong to the shareholders in an effort to prevent shareholders from choosing Nunavut Iron's superior offer."

The Baffinland board adopted  the new shareholders' rights plan just four weeks after the Ontario Securities Commission cease traded Baffinland's prior shareholders' rights plan on the basis that it was hindering the ongoing contest between Nunavut Iron and ArcelorMittal.  In rejecting the previous Baffinland poison pill, the Ontario Securities Commission stated:

    "While there is no assurance that there will ultimately be a clear winner between the ArcelorMittal Offer and the Nunavut Offer, Baffinland shareholders are capable of making the relevant choices. …It is the Baffinland shareholders who should determine the outcome of the two competing bids for their shares."

By creating a new shareholders' rights plan, the Baffinland board has plainly acted contrary to both the instructions and the intent of the Ontario Securities Commission. The new poison pill is intended to remove the right of Baffinland shareholders to "determine the outcome of the two competing bids". 

Shareholders should also consider the advice of the Baffinland board and its financial advisor set out in the Directors' Circular mailed to shareholders on October 7, 2010.  Nunavut Iron's Offer provides shareholders with the opportunity to crystallize the value of a substantial portion of their investment at a significant premium - and at a continued premium to the ArcelorMittal offer - as well as the opportunity for continued participation in the benefits of the development of the Mary River property described by the Baffinland board in its Directors' circular.

Baffinland shareholders who wish to retain their right to choose and want to see the auction for Baffinland continue are urged to act quickly to express their opposition to Baffinland's shareholders' rights plan by faxing a letter to the Ontario Securities Commission at:

Ontario Securities Commission
20 Queen Street West, Suite 1903
Toronto, ON M5H 3S8

Attention:  Mergers & Acquisitions Team

Fax:  416-593-8177

ABOUT NUNAVUT IRON AND IRON ORE HOLDINGS, LP

Nunavut Iron was incorporated under the laws of Canada on August 27, 2010 and has not carried on any material business other than in connection with matters directly related to the Offer. Nunavut Iron is wholly owned by Iron Ore Holdings.

Iron Ore Holdings is a limited partnership formed under the laws of Delaware for the purpose of making the Offer.  Iron Ore Holdings is owned by Bruce Walter, the Chairman of Nunavut Iron, Jowdat Waheed, the President and Chief Executive Officer of Nunavut Iron, and funds managed by The Energy & Minerals Group, which is providing the majority of the equity financing for the Offer.  The Energy & Minerals Group is a private investment firm with a family of funds with over US$2 billion under management that invest in the energy and minerals sectors.

SOURCE NUNAVUT IRON ORE

For further information: For further information:

SHAREHOLDERS OF BAFFINLAND IRON MINES CORPORATION

Kingsdale Shareholder Services Inc.
Toll Free 1-888-518-1562 (English or French)
Outside North America, Bankers and Brokers Call Collect 416-867-2272
Facsimile: 416-867-2271, Toll Free Facsimile 1-866-545-5580
Email: contactus@kingsdaleshareholder.com

or visit www.baffinlandoffer.com

MEDIA

John Lute
Lute & Company
416-929-5883
Email:jlute@luteco.com

Organization Profile

NUNAVUT IRON ORE

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890