Activist Gains Board Control at Cliffs Natural Resources

NEW YORK (The Deal) -- Activist hedge fund Casablanca Capital said Tuesday that all six of its nominees have been elected to the board of Cliffs Natural Resources (CLF), according to preliminary estimates by its proxy solicitor of the voting results of the company's annual meeting.

The results, if verified, would hand effective control of the mining company to the 5.2% activist stakeholder as Cliffs has an 11-person board.

Cliffs said on Tuesday that it would await a preliminary report from the inspector of the election, IVS Associates Inc., before saying anything further. It did, however, say that its board and management remained "deeply committed to continue to create long-term value for all of our shareholders." A spokesman for the Cleveland-based company said it wasn't commenting beyond the statement.

Casablanca also declined further comment.

But indications are that there have been no discussions about a settlement, according to people familiar with the matter, something that can happen even at this late stage.

Casablanca founder Donald Drapkin said in a statement that Cliffs shareholders have sent a resounding message of support for its efforts to drive meaningful change at the mining company, bring accountability to the company's leadership and restore shareholder value.

Lourenco Goncalves, one of the Casablanca nominees who was elected and who the hedge fund has said it would like to see as CEO, said the nominees look forward to working with the continuing members of Cliffs' board and the company's employees. "We are confident there is much we can and will do to refocus Cliffs and steer it in a new strategic direction," he said.

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