Noront ups offer for Freewest in duel with Cliffs

AP News
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Posted: Dec 01, 2009 4:29 PM

Canadian mining company Noront Resources said Monday it is upping its offer to buy fellow miner Freewest Resources Canada a week after the company had agreed to be bought by U.S. mining company Cliffs Natural Resources.

Noront said its offer has an implied value of 222 million Canadian dollars ($207.2 million) or 86 cents Canadian per share (81 cents).

The deal with Cleveland-based Cliffs was valued at 150.6 Canadian dollars ($141.8 million) or 70 cents Canadian per share (66 cents).

Noront said its offer is final and will not be increased. It will expire on Dec. 11. The company made its first offer for Freewest in October.

Under the deal, Freewest shareholders will receive one Noront share for every 3.5 Freewest shares they own along with a warrant entitling them to buy one Noront common share for every seven Freewest common shares they own. The warrants have an exercise of $4 Canadian ($3.77)

Meanwhile, Cliffs said Monday it purchased 6.9 million more shares of Montreal-based Freewest in a private placement, boosting its ownership through a subsidiary to 21.7 million common shares, or 9.75 percent. Previously it indirectly held 14.8 million common shares, or a 6.86 percent stake.

Cliffs said it acquired the additional shares in order to fund Freewest's working capital needs and the continuing work on Freewest's McFaulds property.

Shares of Cliffs rose $1.01, or 2.3 percent, to close at $45.07. Earlier shares climbed to a 52-week high of $45.75.