July 2 (Reuters) - Cliffs Natural Resources Inc said on Wednesday it would replace its chairman after its annual meeting and also offered a dissident shareholder three seats on a reduced nine-person board.
Cliffs’ stock was up 5.2 percent at $15.78 on the New York Stock Exchange.
The U.S.-based iron ore and metallurgical coal producer said it was making the offer to New York-based hedge fund Casablanca Capital in an attempt to settle a “costly and distracting” proxy contest.
Cliffs said it would elect a new chairman irrespective of whether Casablanca accepts the settlement offer. Cliffs’ chair is James Kirsch and its annual meeting is set for July 29.
Casablanca, which owns 5.2 percent of Cliffs stock, accuses the company of destroying shareholder value.
Cliffs previously offered Casablanca two seats on its board, which it planned to reduce to nine seats from the current 11.
If, however, Casablanca did not accept the new settlement offer, Cliffs’ board will remain at 11 members, the company said.
Casablanca was not immediately available for comment. (Reporting by Nicole Mordant in Vancouver; Editing by Chizu Nomiyama)