The activist hedge fund pressing for change at Cliffs Natural Resources started a proxy fight at the mining concern on Thursday, naming six candidates for the company’s board.
The hedge fund, Casablanca Capital, also continued its attack on Cliffs’ management, arguing that the existing directors are circling the wagons and ignoring suggestions that could improve value for shareholders. (It even set up a website for its campaign.)
The announcement on Thursday came as little surprise, as Casablanca had already signaled that it planned to escalate its campaign against the company. The hedge fund wants the firm, which mines iron ore and coal, to spin off its Bloom Lake property in Canada with its Asian operations, and then put its remaining businesses into a master limited partnership to cut taxes.
So far, Cliffs has announced plans to trim up to $425 million in capital spending and lay off 500 employees. It also named Gary Halverson, its chief financial officer, as its new chief executive.
None of that has impressed the activist investor thus far.
“As a significant shareholder, we are troubled by the value destruction that has occurred under the current board’s watch and firmly believe the status quo is unacceptable â€" shareholders have suffered enough,†Casablanca wrote in a letter to Cliffs’ board on Thursday. “Cliffs desperately needs a new strategy and leadership with a fresh perspective.â€
Casablanca’s six candidates are:
- Lourenco Goncalves, the former chief executive of Metals USA and the hedge fund’s choice to become Cliffs’ next chief
- Rip Fisher, a former banker at Goldman Sachs
- Patrice Merrin, the former chief executive of Luscar, another mining company
- Joseph Rutkowski, a former senior executive of Nucor
- Gabriel Stollar, a former chief financial officer of Vale, the Brazilian mining firm
- Douglas Taylor, the chief executive of Casablanca
