Cleveland, Ohio, US-based metallurgical coal and iron ore pellet producer Cliffs Natural Resources Inc. announced on July 6 that all of the conditions of its CA$0.19 per share all-cash offer to acquire all of the common shares of Canadian miner Spider Resources Inc. have been satisfied or waived.
Consequently, Cliffs has taken up the approximately 316 million common shares that were validly tendered as of July 6, 2010 under Cliffs' all-cash offer to purchase all of the common shares. When combined with Cliffs' prior holdings, Cliffs now owns 52.1 percent of Spider. The company has also extended the time of expiry of its offer to July 16, 2010 in order to permit additional shares to be tendered.
As SteelOrbis previously reported, Spider was informed on June 5 by another Canadian miner KWG Resources Inc. that KWG will not submit an offer to match Cliffs' offer. As a result, the combination agreement between KWG and Spider has been terminated and Spider has paid KWG a termination fee of CA$2.3 million (US$2.17 million).
Cliffs' all-cash offer for Spider represents a 138 percent premium over the closing price of the common shares of Spider on the TSX Venture Exchange on May 21, 2010, the last trading day prior to Cliffs' announcement of bidding for Spider, valuing Spider at CA$125 million.
Cliffs announced on May 24 that it intends to make takeover bids pursuant to which Cliffs or an affiliate would acquire all of the common shares of KWG and/or Spider which are not owned by Cliffs or its affiliates. Cliffs made a formal offer for Spider on May 31.
Both companies hold a 26.5 percent stake each in the Big Daddy chromite project in Northern Ontario. The proposition was followed by KWG and Spider entering into a binding letter agreement regarding a proposed merger between the two companies.