(Adds Casablanca statement, context, details on Kirsch; updates
stock price move)
July 2 Cliffs Natural Resources Inc said
on Wednesday it would elect a new chairman after its annual
meeting in July and also offered a dissident shareholder a third
of the seats on its board.
The Cleveland-based iron ore and metallurgical coal
producer, which is in the midst of a proxy battle, declined to
say why it was replacing James Kirsch, who was appointed
chairman in July 2013. He has been on the Cliffs board since
Cliffs' stock was up 5.4 percent at $15.82 on the New York
Cliffs is locked in a proxy contest with New York-based
hedge fund Casablanca Capital, which owns 5.2 percent of Cliffs
stock and accuses the company of destroying shareholder value.
Casablanca wants to replace Cliffs' CEO with its own candidate
as well as a majority of its board.
Casablanca said in a statement that Cliffs' press release
issued on Wednesday before engaging with Casablanca's principals
was "another public relations ruse by an incompetent and
entrenched board that has failed shareholders".
Cliffs said it was offering Casablanca three seats on a
reduced nine-person board in an attempt to settle a "costly and
distracting" proxy contest. The company did not say which of its
directors would vacate their posts. Cliffs previously offered
Casablanca two seats on its board, which currently consists of
Cliffs said it would elect a new chairman irrespective of
whether Casablanca accepts the settlement offer. Cliffs' annual
meeting is set for July 29.
If, however, Casablanca did not accept the new settlement
offer, Cliffs' board will remain at 11 members, the company
(Reporting by Nicole Mordant in Vancouver; Editing by Chizu
Nomiyama and Diane Craft)