The two rival companies bidding for control of Baffinland Iron Mines Corp. announced Friday they are teaming up.

ArcelorMittal and Nunavut Iron Ore Acquisition are joining forces with a bid that values Baffinland at about $590 million.

Baffinland three-month chart

The joint offer by ArcelorMittal, the world's largest steel producer, and Nunavut Iron Ore Acquisition amounts to $1.50 per share for all of the Canadian company.

The offer also includes 10 cents per Baffinland warrant.

That's up from an earlier proposal by ArcelorMittal of $1.40 per share and an offer by Nunavut Iron of $1.45 per share.

"Going head to head is an expensive process, and I think we both felt that this was an acceptable outcome for each of us and served our interests better," Nunavut Iron chairman Bruce Walter told CBC News.

"Together with Nunavut Iron, we are providing a more attractive offer to Baffinland shareholders than either of us were prepared to provide on our own," said Peter Kukielski, ArcelorMittal's head of mining.

Baffinland shares closed up three cents to $1.55 Friday on the Toronto Stock Exchange, suggesting at least some investors thought a higher offer might be possible.

Baffinland's board of directors had supported ArcelorMittal's earlier bid and urged its shareholders to reject Nunavut Iron's bid.

In an email to CBC News, a Baffinland spokesperson said its board of directors has to assess the new joint proposal before it decides what to recommend to shareholders.

Deal unfair, says Baffinland ex-CEO

The offer came as former Baffinland chief executive Gordon McCreary works on putting together a third option with an unidentified Chinese firm.

McCreary called the new joint offer unacceptable, saying Nunavut Iron owns 10 per cent of Baffinland shares and it's now getting an unfair advantage to take over part of the company.

"It does not allow other shareholders to participate in such a deal, and as such it is not fair and equitable to all shareholders," McCreary told CBC News late Friday from Beijing.

McCreary said he is hoping the Chinese company will put in an offer to buy Baffinland at a better price.

"The value is enormous, and giving it away for $500 million, $600 million is a travesty," he said.

McCreary, who stepped down from the Baffinland board in November after ArcelorMittal's friendly deal was first announced last year, had called the earlier offers by ArcelorMittal and Nunavut Iron far too low.

Offer open until Jan. 24

The offer is open until midnight on Jan. 24 and requires that at least two-thirds of Baffinland shares be tendered.

ArcelorMittal and Nunavut Iron had been in a takeover fight for Baffinland and its massive Mary River iron ore project in the Canadian Arctic.

ArcelorMittal sought all of Baffinland, while Nunavut Iron only wanted to increase its roughly 10 per cent stake in the company to 60 per cent.

The move comes the same week as two other big mining takeover offers. On Tuesday, Cleveland-based Cliffs Natural Resources said it had agreed to buy Consolidated Thompson Iron Mines of Montreal for about $4.9 billion in cash, and a day later Toronto-based firms Inmet Mining and Lundin Mining signed a $49-billion merger deal.

Demand for iron ore, used in the production of steel, has returned since the recession and the emerging economies of India and China have swung back into high gear.

With files from The Canadian Press