Cliffs Natural Resources Inc announced that it has executed a definitive support agreement with Spider Resources Inc under which Spider has agreed to support Cliffs’ previously disclosed all cash offer for Spider at CAD 0.19 per Spider share.
Spider was informed by KWG Resources Inc that KWG will not submit an offer to match Cliffs’ All-Cash Offer. As a result, the combination agreement between KWG and Spider has been terminated and Spider has paid KWG a termination fee of CAD 2.3 million.
Cliffs’ All Cash Offer for Spider represents a 138% premium over the closing price of the common shares of Spider on the TSX Venture Exchange on May 21, 2010, the last trading day prior to Cliffs’ announcement of its intention to bid for the common shares of Spider. Cliffs’ All-Cash Offer implies a total equity value for Spider on a fully-diluted basis of CAD 125 million.
Spider, in accordance with its support agreement with Cliffs, has cancelled the special meeting of Spider shareholders that had been scheduled for July 8, 2019 to consider the proposed merger between KWG and Spider.
Mr William C Boor president of Cliffs’ Ferroalloys business unit said “Cliffs’ offer provides immediate value, liquidity and certainty for Spider shareholders. We encourage Spider shareholders to tender their shares by the July 6 deadline to take advantage of our all-cash offer.”
Mr Neil Novak president & CEO of Spider said “We have agreed to give our full support to Cliffs because Cliffs’ All Cash Offer is clearly in the best interest of Spider’s shareholders. All directors and officers of Spider have agreed to tender their shares under Cliffs’ All Cash Offer, and we strongly recommend that all other Spider shareholders tender as well.”
Cliffs currently holds approximately 4.2% of the outstanding shares of Spider on a fully-diluted basis. In addition, the lock-ups received from Spider directors and officers represent approximately 6.2% of the outstanding shares of Spider on a fully-diluted basis. Further, as previously disclosed, Cliffs has a lock-up agreement with Spider’s largest shareholder, MineralFields Group, under which it has agreed to tender its Spider shares, which represent 10.8% of the outstanding shares of Spider on a fully-diluted basis.
