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UPDATE 1-Miner Cliffs to elect new chair, offers dissident third board seat
July 2, 2014 / 5:27 PM / 3 years ago

UPDATE 1-Miner Cliffs to elect new chair, offers dissident third board seat

(Adds Casablanca statement, context, details on Kirsch; updates stock price move)

July 2 (Reuters) - 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 2010.

Cliffs’ stock was up 5.4 percent at $15.82 on the New York Stock Exchange.

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 11 directors.

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 said. (Reporting by Nicole Mordant in Vancouver; Editing by Chizu Nomiyama and Diane Craft)

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