A proposed friendly takeover of Consolidated Thompson Iron Mines Ltd. by Cliffs Natural Resources will not affect jobs at either the Scully Mine in Wabush Labrador or the Bloom Lake property just across the Quebec border, according to a company official.
On Tuesday, Cliffs Natural Resources — which already owns the Scully Mine — announced the $4.9-billion takeover bid, offering $17.25 in cash per share to Thompson’s shareholders.
That’s a 30 per cent premium on top of the company’s share price of $13.38 as listed on Tuesday on the Toronto Stock Exchange.
Thompson’s share price opened on the TSX Wednesday at $17.90, but by mid afternoon it had settled to $17.38.
The deal still requires the approval of two-thirds of Consolidated Thompson’s shareholders.
That process, according to Dale Hemmila — district manager of public affairs for Cliffs — will take until April or May to complete.
But according to Thompson’s CEO, former premier Brian Tobin, the deal is a good one for his company’s shareholders.
“We are delighted that a company of the financial and technical strength of Cliffs, with considerable nearby infrastructure and experience in the Labrador Trough, is going to take our world-class mine and projects to the next stage,” Tobin said in a news release.
Hemmila said Thompson’s Bloom Lake property is the focus of the takeover, as it’s only about 20 kms from its mine in Wabush.
“We look at the acquisition of Consolidated Thompson as something that would complement that,” he told The Telegram Wednesday. “We feel that there are a lot of synergies related to the potential acquisition.”
If the take-over is approved by Thompson’s shareholders, Hemmila said, the next step is to upgrade Cliffs’ shipping port at Sept Isle, Quebec, to handle the extra ore for shipping to Asian markets.
“We don’t see any significant impact on what we’re doing at Scully. We continue to work there to do all the plans that we have in place,” Hemmila said.
“Obviously this is a growth opportunity for the company and something that we view as very positive.”
He said the deal has been in the works for about a year.