A bidding war between Cliffs Natural Resources (CLF-N) and Noront Resources (NOT-V) for Freewest Resources Canada (FWR-V) has come to an end.
On Dec. 10 Cliffs Natural Resources raised its offer for Freewest from 96¢ per share to $1 in a move that had the unanimous backing of the junior’s board of directors.
Cliffs’ revised offer values Freewest at about $240 million and represented a 13.6% premium to Freewest’s closing price on Dec. 9.
Noront’s competing offer expired just before midnight the following day, with 11.75 million Freewest shares being tendered to the bid. The junior now owns 4.5% of Freewest’s shares on a fully diluted basis.
“We realized from the onset that the successful takeover of Freewest would be a challenge but it offered significant potential value to all shareholders,” Wes Hanson, Noront’s president and chief executive, said in a prepared statement on Dec. 14.
In welcoming the Freewest shareholders who tendered their shares to Noront’s bid, Hanson added that the company’s focus in the coming months would be directed at continuing the development of its Ring of Fire assets including the Eagle’s Nest nickel-copper-PGE deposit, the Blackbird chromite deposit, the AT12 nickel-copper-PGE deposit and the Triple J gold zone.
Noront suffered a second blow last week when Canada’s Investment Industry Regulatory Organization suspended the trading of its shares on the Toronto Stock Exchange for several hours on Dec. 10. Trading was resumed after Noront retracted an estimated mine life and revenue projections for its Blackbird chromite deposit because they were not supported by an independent economic analysis.
Freewest is holding a special shareholder meeting in January to make a determination on Cliff’s offer.
At presstime Freewest was trading at 96¢ per share and had traded in a range of 13¢-99¢ per share over the last 52 weeks. Freewest has 214.9 million shares outstanding.
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