Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) announced today that it has further amended the terms of the definitive agreement disclosed on Nov. 23, 2009, to acquire Montreal-based Freewest Resources Canada Inc. (TSX-V: FWR) by way of a plan of arrangement. The further amendment involves an increase in the price to a fixed value of CAD$1.00 in Cliffs shares per Freewest share. Cliffs also indicated it has entered into voting agreements with shareholders of Freewest holding an aggregate of 24.7 million shares, or approximately 10.5% of the Freewest common shares outstanding. These shareholders have agreed to vote in favor of the plan of arrangement.
At CAD$1.00, the increased Cliffs offer represents a premium of 217% to Freewest’s unaffected share price on Oct. 2, 2009, and a premium of 28% to a competing “final” takeover bid from Noront Resources Ltd., which, as of the market close on Dec. 9, 2009, had an implied value of CAD$0.78 per share, assuming a value of CAD$0.11 for the fraction of a Noront warrant. Recently, Noront has implied the value of the fraction of its warrant is as much as CAD$0.28. As Cliffs previously outlined in a news release on Dec. 7, 2009, it believes Noront is grossly overstating the value of this warrant and urges Freewest shareholders to review Noront’s valuation method closely.
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