Jun. 16, 2010 - Cliffs Natural Resources Inc. said Wednesday that it is raising its offer for Spider Resources Inc. by 27 percent to Canadian $109 million ($105.9 million) and wants the company to terminate a proposed merger deal with KWG Resources Inc.
Previously, Cliffs offered $82 million (Canadian $86 million) for Toronto-based Spider. The Cleveland-based company said its offer is more than double the closing price of Spider's shares on May 21, before it made its first bid for the company. Spider's board said in a statement that Cliffs' proposal is "superior."
KWG has five days to match Cliffs' offer.
Cliffs, Spider and KWG are partners on a chromite project in Northern Ontario. Cliffs has the largest stake in the Big Daddy project, with a 47 percent holding. But if Spider and KWG merge, they will have majority control. Cliffs can stop that by acquiring either or both companies.
Chromite is used in stainless steel.
Cliffs also planned to make an offer for KWG, but it appears Cliffs no longer plans to make a bid. It asked KWG to evaluate itself in May but said Wednesday it has now advised KWG that the valuation is no longer necessary.
Cliffs shares fell 42 cents to close at $57.51.
