Baffinland board recommends ArcelorMittal offer

The board of directors of Baffinland Iron Mines has recommended its shareholders accept an offer from European steelmaker ArcelorMittal to buy all outstanding shares.

ArcelorMittal, which is locked in a bidding war for Baffinland with Nunavut Iron Ore Acquisition, increased its bid from $1.10 a share to $1.25 a share on the weekend. The new bid values the company at about $492 million.

Nunavut Iron, a subsidiary of the Energy & Minerals Group, has offered $1.35 a share, but has limited its offer to the number of shares it needs to increase its stake to 50.1 per cent of the company.

Both offers expire at the end of December.

The bidding war has more than doubled the price of Baffinland shares in the last two months.

Baffinland is trying to raise money to develop its Mary River property on Baffin Island, near Pond Inlet, Nunavut. It proposes to developan iron ore mine that would produce 18 million tonnes per year.