In what’s looking like it could be as protracted as the Hundred Years’ War, the battle between Cliffs Natural Resources (CLF) and activist investor Casablanca Capital escalated last night.
Reuters Just to refresh: Casablanca has been pushing Cliffs to make some big change, including a possible breakup. And Cliffs has, just not the ones Casablanca wants. It’s appointed a new CEO; cut costs; postponed its expansion of Bloom Lake; it even beat earnings for the fourth consecutive quarter. (I cribbed all that from here.)
Cowen’s Anthony B. Rizzuto and team take it from there:
Activist investor Casablanca laid out its proposal to nominate six directors for election to CLF’s Board. To avoid a potentially costly proxy contest, CLF offered to permit Casablanca to appoint two new directors to the Board and a third mutually agreed upon to be named at a later date. This offer was rejected, and as a result, CLF has postponed its annual meeting as discussions continue. With only a 5.2% stake, we question whether Casablanca alone will be able to accomplish the goals it has laid out.
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Shares of Cliffs Natural Resources have fallen 2.7% to $18.59 at today at 3:42 p.m., while Rio Tinto (RIO) has fallen 3.6% to $53.36, BHP Billiton (BHP) has dropped 2.2% to $66.64 and Vale (VALE) has plunged 5% to $13.05.
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