Cliffs Says CEO Carrabba to Retire by Year-End
Cliffs Natural Resources Inc. (CLF), the largest U.S. iron-ore producer, rose the most in more than three weeks after saying Chairman and Chief Executive Officer Joseph Carrabba will retire by the end of the year.
Cliffs gained 5.7 percent to $17.33 at 9:35 a.m. in New York, after earlier climbing 6.5 percent, the most intraday since June 13.
James Kirsch, a Cliffs director, was appointed non-executive chairman, the Cleveland-based company said in a statement yesterday after the close of trading. The announcement caps nine months during which Cliffs has idled some mines, postponed development work, cut its dividend and sold equity to conserve cash as iron-ore prices slumped.
“While it’s too early to speculate on strategic changes it might make, we think all options are now on the table,” Garrett S. Nelson, an analyst at BB&T Capital Markets in Richmond, Virginia, said today in a note. He raised his recommendation on the shares to buy from hold.
Under Carrabba, who became CEO in 2006, Cliffs expanded the company globally and bought Thompson Consolidated Iron Mines Ltd. for C$4.4 billion ($4.2 billion) including debt in 2011, adding iron-ore assets in Canada. Cliffs wrote down the value of the Thompson assets by $1 billion in the fourth quarter. Shares of Cliffs fell 58 percent this year through yesterday.
Laurie Brlas, president of global operations and the company’s former chief financial officer, has retired, Cliffs said yesterday. It also appointed Mark E. Gaumond, a former Ernst & Young LLP executive, to the board.
Executive-search firm Heidrick & Struggles International Inc. was retained to help find a new CEO.
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