Cliffs Natural Resources said Wednesday that it will replace its chairman as part of the latest effort to settle a proxy fight with an activist investor, but Casablanca Capital said the mining company's offer doesn't go far enough.
Cliffs said it would let Casablanca choose three new directors for the board, which would shrink to nine members from 11, and give Casablanca a say in picking a chairman to replace James Kirsch. If the deal were to happen, six Cliffs directors would have joined in the last 18 months. Cliffs said Kirsch will be replaced whether Casablanca accepts the offer or not.
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Casablanca said the Cliffs board has failed its shareholders and bigger changes are needed.
Casablanca Capital LP, which owns about 5.2 percent of Cliffs' stock and is its fourth-largest shareholder, has been pushing Cliffs to shake up the company. In January, it recommended included spinning off the company's international assets, cutting costs, doubling its dividend, and changing its U.S. assets into a master limited partnership.
In March, Cliffs offered Casablanca the opportunity to name two directors to an 11-member board, and said it could choose a third director later. Casablanca rejected that offer and said it wants to take full control of the board and replace President and CEO Gary Halverson, who was appointed in February.
Casablanca has put up six candidates for election at Cliffs' annual meeting of shareholders, scheduled for July 29.
Cleveland-based Cliffs Natural Resources Inc. shares rose 71 cents, or 4.7 percent, to $15.71 in afternoon trading. The stock is still down about 40 percent in 2014.