Public mergers and acquisitions spats have a language of their own, with banalities like "superior offer" and "value creation" commonly thrown around.
Sometimes, however, the rhetoric gets a bit nasty, as it did from September to January when Nunavut Iron Ore Acquisition Inc. and ArcelorMittal vied for control of the ambitious Mary River iron ore project on Baffin Island, which Baffinland Iron Mines Corp. owned at the time. Although the specific words weren't so mean, both sides kept raising their bids and releasing new public statements to shareholders, refusing to give even an inch to their rival.
Then, in early January, something uncommon happened: The two sides reached an agreement and joined forces to buy Baffinland. It was a shock at the time, and few people knew how it came together behind the scenes.
Now that the deal has closed, Bruce Walter, Nunvaut Iron Ore's chief, has opened up about the deal, explaining why he first extended the olive branch to Arcelor and offering insight into the negotiations' tone.
For starters, Mr. Walter said his first call to Europe was neither acrimonious nor jovial. "It was somewhere in between," he said before chuckling. "It was certainly cordial and business-like."
What he said in that call impressed Arcelor, and the two ultimately agreed on a 70-30 split. Asked why he thought Arcelor played ball, Mr. Walter said that "it became clear to Arcelor that we weren't going away."
"We were a) determined to stay in the fight, and b) had a lot more fire power than they thought we had," he said, alluding to his backing by U.S. private equity player Energy and Minerals Group.
Once that was clear, the two sides held conference calls across the Atlantic so that Mr. Walter could negotiate with Arcelor's key personnel in Europe. Fortuntely for him, he had met some of them at mining functions in the past, so his first chat wasn't a complete cold call.
Mr. Walter acknowledges that it was strange for a takeover battle to end this way, but he said mining is probably the most amenable sector for such a resolution. "[Mary River]was a big enough asset and it had a big enough capital tag to it that it was possible to do it in a joint venture," he said.
It also helped that Nunavut and Arcelor aren't direct competitors.
Mr. Walter said a compromise was reached also because the public spat never got too dirty, which he liked. "If you're planning on being [in the industry]for any length of time, you're going to be running into people multiples times," he said. "It rarely does you any good to be acting in a way that burns bridges, in a way, to future transactions."
Now that the takeover is behind them, Arcelor and Nunavut have been working well together, Mr. Walter said. But there are a few delicate issues, such as a class action lawsuit brought forward by Siskinds LLP, which claims that the information sent to Baffinland's shareholders omitted or misstated information material to the assessment of the bid.
As for the future, "the focus right now is on developing Mary River," Mr. Walter said. However, he added he's actively looking at other projects. "I wouldn't be surprised if we were doing something else in addition to our interest in Mary River in the next 12 months."