Yahoo Finance Cliffs says Casablanca turns down settlement offer
Cliffs Natural Resources says Casablanca rejects offer made in attempt to settle proxy fight
CLEVELAND (AP) -- Cliffs Natural Resources Inc. said Friday that activist investor Casablanca Capital has turned down its offer of board seats, which was made in an attempt to settle a proxy fight.
Casablanca Capital LP, which owns about 5.2 percent of Cliffs' stock, has pushed the mining company to cut costs and spin off its Bloom Lake project and other international assets. Cliffs previously announced that it planned to suspend its expansion plan at its Bloom Lake mine in Quebec due to the uncertain outlook for iron ore prices.
On Friday Cliffs said that it offered Casablanca the opportunity to appoint two independent directors to its 11-member board and a third mutually agreed-on board member to be named in the future. Cliffs said it tried to reach a settlement with Casablanca in order to avoid a "costly and distracting" proxy contest.
Cliffs confirmed Friday that Casablanca is nominating six candidates for its board at its annual shareholders meeting.
Cleveland-based Cliffs said Casablanca rejected its settlement offer and told them that they plan to continue to seek full control of Cliffs' board and to replace its CEO Gary Halverson through a proxy contest.
Cliffs said that it remains ready to engage with Casablanca to try to resolve the matter. The company said that Casablanca requested that it postpone the date of its annual shareholders meeting. Cliffs said that in order to accommodate the request and to continue to pursue a possible settlement that it has postponed its annual meeting, which had been scheduled for May 13. The company said it would announce the new date for the meeting sometime in the future.
Casablanca said in a statement that it believes Cliffs' board is "showing its true colors by indefinitely postponing a shareholder vote and falsely suggesting that the delay was advocated by Casablanca." The New York company said that it looks forward to having a substantive dialogue with other Cliffs Natural shareholders.
Shares of Cliffs fell 33 cents to $18.77 in morning trading. The stock is down 28 percent in the year to date.
