Saturday, 1 October 2016
Last updated 14 hours ago
Aug 25 2008 | 1:00am ET
Mining company Cleveland-Cliffs Inc. is urging investors not to give an activist hedge fund effective veto power over a proposed acquisition that the hedge fund opposes.
The company recommended that shareholders reject a bid by Harbinger Capital Partners to increase its stake in Cleveland-Cliffs to as much as one-third. Cleveland-Cliffs needs to win the votes of two-thirds of shares to approve the $8.1 billion deal for Alpha Natural Resources.
Harbinger, which is Cleveland-Cliffs’ largest shareholder with a 15.57% stake, argues that the takeover of Alpha is not in the best interests of shareholders. Earlier this month, the hedge fund—which has focused on media companies recently, including Cablevision and The New York Times Co.—asked Cleveland-Cliffs to hold a shareholder vote, required under Ohio law, that would allow Harbinger to increase its stake to between 20% and one-third.
The vote is scheduled to be held on Oct. 3.