Cliffs and Spider enter into support agreement towards acquisition

Tuesday, 06 July 2010 12:05:01 (GMT+3)   |  
       

Cleveland, Ohio, US-based metallurgical coal and iron ore pellet producer Cliffs Natural Resources Inc. announced on July 6 that it has executed a definitive support agreement with Canadian miner Spider Resources Inc. under which Spider has agreed to support Cliffs' previously disclosed all-cash offer for Spider at CA$0.19 (US$0.179) per Spider share.

According to a Cliffs statement, Spider was informed by Canadian miner KWG Resources Inc. on the morning of the same day 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' offer provides immediate value, liquidity and certainty for Spider shareholders," said William C. Boor, president of Cliffs' Ferroalloys business unit. "We encourage Spider shareholders to tender their shares by the July 6 deadline to take advantage of our all-cash offer," he stated.

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.

As SteelOrbis previously disclosed, 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.

Cliffs currently holds an aggregate of 27,434,500 common shares in Spider, representing approximately 4.2 percent of the issued and outstanding common shares on a fully-diluted basis.


Similar articles

Major steel and raw material futures prices in China - March 29, 2024

29 Mar | Longs and Billet

Iron ore prices drop by over $9/mt week on week, mood remains bad

28 Mar | Scrap & Raw Materials

Goa government to ease policy for liquidating iron ore dumps lying on private land

28 Mar | Steel News

Major steel and raw material futures prices in China - March 28, 2024

28 Mar | Longs and Billet

CISA: Coking coal purchase cost in China down 9.86% in Jan-Feb

28 Mar | Steel News

Brazilian high-grade iron ore price declines sharply in two days

27 Mar | Scrap & Raw Materials

Daily iron ore prices CFR China - March 27, 2024

27 Mar | Scrap & Raw Materials

India’s JSPL takes operational charge of iron ore complex in Venezuela

27 Mar | Steel News

Major steel and raw material futures prices in China - March 27, 2024

27 Mar | Longs and Billet

Vale selected to begin award negotiations for US briquette plant

26 Mar | Steel News