March 7, 2014 / 12:52 PM / 3 years ago

UPDATE 2-Cliffs Natural says activist investor rejected offer to end proxy fight

* Says offered to let Casablanca appoint two independent directors to the board

* Says a third director was to be appointed on mutual agreement

* Says postponing record date for annual shareholder meeting

March 7 (Reuters) - Iron ore producer Cliffs Natural Resources Inc said Casablanca Capital LP rejected an offer to settle a proxy fight, and the activist investor was seeking full control of the company's board.

Cliffs said it offered to allow Casablanca appoint two independent directors to the board. A third director was to be appointed on mutual agreement.

"We are disappointed that Casablanca seems intent on waging a public campaign rather than continuing its private engagement with Cliffs' board and management team," Cliffs said on Friday, adding that it was ready to engage with Casablanca.

Casablanca, Cliffs' fifth-largest shareholder, nominated six directors for election on Thursday.

The investor, which owns about 5.2 percent of Cliffs Natural, started its activist campaign in January and wants the company to spin off its "riskier" international operations from its cash-generating U.S. assets.

Casablanca, whose slate of directors includes Chief Executive Douglas Taylor and former Metals USA CEO Lourenco Goncalves, has named Goncalves as its preferred candidate for leading Cliffs.

The company appointed Gary Halverson to the top job last month.

Cliffs' shares closed at $19.10 on Thursday. They have slipped 27 percent since the beginning of the year. Iron ore producer Cliffs Natural Resources Inc said activist investor Casablanca Capital LP rejected an offer to settle a proxy fight and was seeking full control of the company's board.

Casablanca, Cliffs' fifth-largest shareholder with about a 5 percent stake, nominated six directors for election to the company's 11-member board on Thursday.

Cliffs said on Friday it offered to let Casablanca appoint two independent directors. A third director was to be appointed on mutual agreement.

"We are disappointed that Casablanca seems intent on waging a public campaign rather than continuing its private engagement with Cliffs' board and management team," Cliffs said, adding that it was ready to engage with the hedge fund.

Cliffs also said it was postponing the record date - the date on which an investor must own shares to be entitled to vote - for its annual shareholder meeting, as requested by Casablanca, to pursue a potential settlement.

Cliffs is yet to set a new date for the annual shareholder meeting, originally scheduled for May 13.

Casablanca started its campaign in January. It wants the company to spin off its "riskier" international operations from its cash-generating U.S. assets.

Cliffs said last month that it would indefinitely suspend a planned expansion at its Bloom Lake mine in Canada and shut another mine in the country, cutting about 500 jobs.

The company has been hit by weak iron ore prices and higher-than-expected costs at Bloom Lake, once seen by analysts as a key growth prospect.

Casablanca, whose slate of directors includes its Chief Executive Douglas Taylor and former Metals USA CEO Lourenco Goncalves, has named Goncalves as its preferred candidate for leading Cliffs.

The company appointed Gary Halverson to the top job last month.

Cliffs' shares closed at $19.10 on Thursday. They have slipped 27 percent since the beginning of the year.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below