Cliffs Natural Resources (CLF-N) has raised its offer for Freewest Resources Canada (FWR-V) from 96¢ per share to $1 in a move that has the unanimous backing of the junior’s board of directors.
The revised offer values Freewest at about $240 million and represents a 217% premium to Freewest’s closing price on Oct. 2 — just before the announcement of an unsolicited offer from Noront Resources (NOT-V). The new offer price is a 13.6% premium to Freewest’s closing price on Dec. 9.
Under the terms of the amended arrangement agreement, Freewest shareholders will receive a fraction of a Cliffs share representing a fixed value of $1.00 for each Freewest share.
The news catapulted Freewest shares up 10.2% or 9¢ apiece to 97¢ per share with 13.7 million shares changing hands in late morning trading in Toronto.
“This transaction is clearly superior to the amended offer made by Noront, comprised of uncertain value in the form of Noront shares and warrants,” Freewest’s president and chief executive Mackenzie Watson said in a statement.
“The Cliffs transaction will provide Freewest shareholders with highly-liquid shares in a company with a market capitalization in excess of US$6 billion.”
A special shareholder meeting is scheduled for Jan. 15. Noront offer’s is expected to expire on Dec. 11.
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