Cliffs Natural Resources sweetens bid for Freewest

AP News
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Posted: Dec 10, 2009 2:52 PM

U.S. mining company Cliffs Natural Resources again sweetened its takeover bid for fellow miner Freewest Resources Canada Inc., striking back against Noront Resources, a Canadian company also vying to snatch up Freewest.

Cliffs Natural Resources is now offering 1 Canadian dollar (95 cents) worth of stock for each Fremont share it doesn't already own. Based on Freewest's 210.9 million shares outstanding at July 31, Cliffs' bid values the total company at 210.9 million Canadian dollars ($200.4 million). Earlier it had offered 90 cents Canadian (85.6 cents) per share.

Cliffs said holders of about 10.5 percent worth of Freewest shares have agreed to vote for its deal. As of Dec. 2, Cliffs owns about 21.7 million shares of the company, or a 10.1 percent stake.

In its most recent hostile bid, Noront said its offer has an implied value of 222 million Canadian dollars ($211 million) or 86 cents Canadian per share (82 cents). Noront said its offer, which expires Friday, is final and will not be increased. The company made its first offer for Freewest in October.

"We decided to raise our offer to make it as clear and simple as possible for Freewest shareholders to choose Cliffs over Noront," said Joseph Carrabba, CEO of Cliffs. The company has said Noront is overstating the value of its warrants in calculating its purchase price.

Shares of Cliffs fell 35 cents to $42.79 per share in afternoon trading.