Proxy firms: Alpha holders should back Cliffs deal
NEW YORK, Nov 12 (Reuters) - All of the top proxy advisory firms have recommended that Alpha Natural Resources Inc (ANR.N) shareholders vote in favor of an acquisition by Cliffs Natural Resources Inc (CLF.N), which is in doubt due to opposition by Cliffs' largest shareholder.
Alpha said on Wednesday that shareholder advisors RiskMetrics Group and Glass Lewis & Co have said its shareholders should vote for the deal at a special meeting scheduled for Nov. 21. Those recommendations followed similar advice from proxy advisory firms Egan-Jones and Proxy Governance Inc, the company said.
Still, the real test for the deal will come when Cliffs' shareholders vote on it on Dec. 19.
Harbinger Capital Management, Cliffs' largest shareholder with a 15.57 percent stake as of August, has said it believes the Alpha deal is not in the best interest of shareholders.
Much has changed since Cliffs launched its bid for Alpha in July, and shares of both companies have plummeted.
Cliffs' offer of 0.95 of its shares and $22.23 in cash for each Alpha share is now worth about $40.19 a share. Alpha shares closed at $23.95 on the New York Stock Exchange on Wednesday.
The arbitrage spread for the deal -- a measure of the difference between a company's share price and the price a buyer is offering -- is nearly 68 percent. A spread that large indicates serious concerns about the deal closing in its current form.
Cliffs shares closed down 12 percent at $18.91 on the NYSE on Wednesday after hitting $18.16, their lowest point since August 2006, earlier in the day. (Reporting by Michael Erman, editing by Richard Chang, Gary Hill)
