DOW JONES NEWSWIRES
Cliffs Natural Resources Inc. (CLF) said Spider Resources Inc.
(SDERF, SPID.RQ) broke off its agreement to merge with KWG
Resources Inc. (KWGBF, KWG.V) and accepted Cliffs' offer to take
over the company.
All three companies are partners in a chromite project in
Northern Ontario. Earlier this month, Cliffs raised its bid on
Spider 27% to about C$109 million (US$102.6 million), which Spider
determined trumped the terms it agreed to when it entered a binding
letter of intent to merge with KWG. KWG had about five days to
match the offer, which it told Spider earlier Friday that it didn't
intend to do.
Neither KWG nor Spider have significant assets outside the
chromite project.
Friday, Cliffs said Spider supported its all-cash offer at
C$0.19 a share, which it said was a 138% premium. Spider had paid
KWG a C$2.3M breakup fee.
Chromite is used to make chromium, which is in turn used in the
production of stainless steel.
Cliffs shares were down 0.5% at $46.65 after hours. The stock
has nearly doubled in value in the last year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com