and is Financially Superior to Nunavut's Coercive Partial Offer

bwire




LUXEMBOURG (Business Wire) -- Regulatory News:




ArcelorMittal today responded to Nunavut Iron Ore Acquisition Inc.'s
("Nunavut") recent allegations regarding ArcelorMittal's improved,
financially superior offer for Baffinland Iron Mines Corporation
("Baffinland"). ArcelorMittal's improved offer of C$1.25 in cash per
common share (the "ArcelorMittal Offer") provides superior value and
certainty for the shareholders of Baffinland. The ArcelorMittal Offer is
made for 100% of Baffinland's shares as compared to Nunavut's offer,
which is a coercive partial bid for only 50.1% of Baffinland's common
shares including those shares already owned by Nunavut.




The current offer by Nunavut is coercive because it forces Baffinland
shareholders to decide whether to accept or reject such offer without
knowing the price at which the shares not taken up would trade should
the current offer by Nunavut be completed. Nunavut's offer leaves
shareholders with the prospect of being left with thinly traded minority
common shares that would unlikely reflect the full value of Baffinland's
assets. In addition, Nunavut's offer provides Baffinland's shareholders
with no certainty as to how many shares will be taken-up due to the pro
rationing of tendered shares. Further, the fact that Nunavut already
owns approximately 10.3% of the common shares means it is effectively
bidding for only approximately 39.8%.




Assuming all of Baffinland's common shares, other than those locked-up
with ArcelorMittal and those owned by Nunavut, are tendered to Nunavut's
offer, Baffinland's shareholders would receive C$1.35 in cash for
approximately 62% of their holdings and would end up continuing to hold
the remaining 38% of their tendered shares. For Baffinland shareholders
to realize the equivalent value offered by the C$1.25 ArcelorMittal
Offer, the remaining minority common shares held by tendering
shareholders would have to trade at or above C$1.09 per share, versus an
unaffected price for Baffinland's common shares of C$0.56 prior to the
initial unsolicited offer by Nunavut on 22 September 2010. The economic
value of the coercive partial offer by Nunavut is substantially less
than the ArcelorMittal Offer and is highly uncertain as it is dependent
on an unspecified royalty structure and project development plan.




Under the current offer by Nunavut, Baffinland shareholders face
continued execution and financing risk with the potential for
significant equity dilution. If the Nunavut offer were successful, these
risks could materially and adversely affect the value of the remaining
minority common shares.




Baffinland has agreed to adopt a new shareholder rights plan in order to
protect Baffinland's shareholders from being coerced into tendering into
Nunavut's inferior partial offer and in order to guard against tactics
by Nunavut that seek to coerce shareholders. Adopting a new rights plan
ensures that Baffinland shareholders can take advantage of the superior
ArcelorMittal Offer.




The increased break fee payable under the ArcelorMittal Offer reflects
Baffinland's board of directors' support for the certainty and value
that the ArcelorMittal Offer provides to Baffinland shareholders.
ArcelorMittal's Offer for all common shares represents an increase of
$0.15 per share, or almost $60 million, more than its original bid.




ArcelorMittal has received all of the required regulatory approvals for
its offer and is uniquely positioned to provide the technical expertise
and financial capacity to evaluate, manage and overcome the
infrastructure challenges associated with the Mary River project, a
project vital to Baffinland's future success.




Contact Information





Information Agent for the Offer





Georgeson





Toll Free (North America): 1-888-605-7641





Collect (Overseas): 1-781-575-2168






E-Mail: [email protected]