Cliffs Says Casablanca Rejects Offer of Two Board MembersThomas Biesheuvel
Cliffs Natural Resources Inc. said activist hedge fund Casablanca Capital LP rejected its offer to appoint two independent directors and said it has postponed a shareholder meeting to pursue an accord.
Casablanca continues to seek full control of Cliff’s board and the removal of the chief executive officer through a proxy contest, Cleveland-based Cliffs said in a statement today.
“We are disappointed that Casablanca seems intent on waging a public campaign rather than continuing its private engagement with Cliffs’ Board and management team,” the company said. It “continues to stand ready to engage with Casablanca to seek to resolve this matter expeditiously, without further disruption to Cliffs.”
Casablanca, the company’s fourth-largest shareholder, has pressed Cliffs to spin off foreign assets and double its dividends. The hedge fund said last month it was backing Lourenco Goncalves to take over as CEO. Cliffs last month appointed Gary Halverson, its chief operating officer, to the post.
The mining company, whose shares have tumbled for three straight years, has delayed a Quebec mine expansion and cut its dividend, while previous CEO Joseph Carrabba stepped down.
Cliffs said it offered Casablanca the right to appoint two independent directors and a third mutually agreed candidate could be added later. The company said a new date for the shareholder meeting will be announced later.
In a separate statement, Cliffs said that Casablanca is nominating six candidates for election to its board.
JPMorgan Chase & Co. is acting as financial adviser to Cliffs and Wachtell, Lipton, Rosen & Katz and Jones Day are acting as legal counsel, it said.