Harbinger seeks to raise stake in Cleveland Cliffs

NEW YORK (Reuters) - Hedge fund Harbinger Capital Partners, the largest shareholder in iron-ore company Cleveland Cliffs Inc (CLF.N), said on Thursday it has sought approval from Cleveland Cliffs' shareholders to raise its ownership stake in the company.

The hedge fund is opposing Cleveland Cliffs' proposed takeover of Alpha Natural Resources (ANR.N), as it contends that the Alpha deal is not in the best interest of shareholders.

Harbinger said in a regulatory filing that it has asked Cliffs' for a shareholder vote that would allow the hedge fund to acquire at least one-fifth or more of Cliffs' outstanding shares.

Harbinger currently controls about 15.57 percent of Cliffs' shares. It also indicated it would not seek to acquire more than a one-third stake in Cliffs.

Cleveland Cliffs agreed to buy coal miner Alpha Natural Resources on July 16, the deal is currently valued at about $8.1 billion.

Harbinger wants Cliffs to consider all options that would maximize shareholder value, including a sale, recapitalization or an alternative transaction.

Cliffs' shares rose 4 percent to $97.39 in afternoon trading on the New York Stock Exchange.

(Reporting by Euan Rocha, editing by Maureen Bavdek)