Labrador Iron Ore Rises After Saying Company May Be Sold
Stock Chart for Labrador Iron Ore Royalty Corp (LIF)
Labrador Iron Ore Royalty Corp. (LIF), the Canadian mining company under pressure from an activist shareholder, rose the most in five weeks after saying it’s considering strategic alternatives, including a potential sale of the company.
Labrador Iron Ore Royalty rose 1.8 percent to C$33.65 at 12:29 p.m. in Toronto. The shares earlier rose as much as 4.1 percent, the biggest intraday gain since March 1.
The company hired advisers including Bank of Nova Scotia, to consider its alternatives, Toronto-based Iron Ore Royalty said in a statement after the close of regular trading April 5.
The move comes in response to Rio Tinto Group’s potential sale of its controlling interest in Iron Ore Co. of Canada, the country’s largest producer of the commodity used in steelmaking. Labrador Iron Ore Royalty owns 15 percent of Iron Ore Co. and collects a royalty of 7 cents on every dollar of revenue generated by the iron ore producer.
“We think Royalty’s statement is very constructive in that it is now considering all alternatives to enhance value,” Blair Levinsky, a Toronto-based co-founder of Waratah Advisors, said today in a telephone interview. “This company is a world-class asset.”
Waratah is pressuring Labrador Iron Ore Royalty to consider putting itself up for sale or dividing the company into separate units and retain its stake in Iron Ore Co.
Rio Tinto Group (POT) hired Credit Suisse Group AG and Canadian Imperial Bank of Commerce to sell all or part of its 59 percent stake in Iron Ore Co., a person close to the matter said on March 1.
To contact the reporter on this story: Christopher Donville in Vancouver at firstname.lastname@example.org
To contact the editor responsible for this story: Simon Casey at email@example.com
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.