Cliffs acquires more shares in Spider, extends deadline for offer

Cleveland, Ohio, US-based metallurgical coal and iron ore pellet producer Cliffs Natural Resources Inc. announced on July 19 that it has taken up approximately 195.5 million common shares of Canadian miner Spider Resources Inc. (Spider) that were validly tendered as of 11.59 pm, July 16, 2010. Cliffs now owns approximately 81.8 percent of Spider, up from 52.1 percent previously. The transaction was realized in relation to Cliffs' CA$0.19 per share all-cash offer to acquire all of the common shares of Spider.
 
The company has also extended the time of expiry of its offer to July 26, 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 would 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), after which Cliffs acquired 52.1 percent of Spider shares.
 
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 intended to make a takeover bid 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.
 
KWG and Spider 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.