Casablanca rejects Cliffs' offer of 3 board seats
(Associated Press Via Acquire Media NewsEdge) NEW YORK (AP) — In its latest bid to settle a proxy fight, Cliffs Natural Resources said Wednesday that it offered to let an activist investor chose three new directors. It is also replacing its chairman.
But Casablanca Capital rejected the offer, saying the mining company's proposal doesn't go far enough. It said the Cliffs board has failed its shareholders and bigger changes are needed.
Cliffs said it would let Casablanca choose three new directors for a 9-person board, giving it a say in picking a chairman to replace James Kirsch. If the deal were to happen, six Cliffs directors would have joined in the last 18 months. Cliffs said Kirsch, who became chairman in July 2013, will be replaced whether Casablanca accepts the offer or not.
Casablanca Capital LP, which owns about 5.2 percent of Cliffs' stock and is its fourth-largest shareholder, has been pushing Cliffs to shake up the company. In January, it recommended spinning off the company's international assets, cutting costs, doubling its dividend, and changing its U.S. assets into a master limited partnership.
In March, Cliffs offered Casablanca the opportunity to name two directors to an 11-member board, and said it could choose a third director later. Casablanca rejected that offer and said it wants to take full control of the board and replace President and CEO Gary Halverson, who was appointed in February.
Casablanca has put up six candidates for election at Cliffs' annual meeting of shareholders, scheduled for July 29.
Cleveland-based Cliffs Natural Resources Inc. shares rose 72 cents, or 4.8 percent, to $15.72 on Wednesday. The stock has dropped 40 percent in 2014.
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