Hedge fund urges Cliffs asset spin-off

Jan 28, 2014 | 04:01 PM | Jo Isenberg-O’Loughlin

Tags  iron ore, Cliffs Natural Resources, Casablanca Capital, Schedule 13D, Securities and Exchange Commission, spin-off, Bloom Lake project, Asia Pacific project Donald Drapkin

NEW YORK — Activist hedge fund Casablanca Capital LP is calling for changes at Cliffs Natural Resources Inc. that it claims will boost shareholder value, including the spin-off of its international assets.

Casablanca Capital—now a beneficial owner of some 5.2 percent of Cliffs—is seeking the spin-off of the miner’s Bloom Lake and Asia Pacific iron ore assets, a move that it said would result in an implied valuation of $53 per share, or roughly two-and-a-half times Cliffs’ current market value, it said in a Jan. 27 filing with the U.S. Securities and Exchange Commission (SEC).

New York-based Casablanca Capital, headed by chairman Donald G. Drapkin, claims in the filing that Cliffs has significantly underperformed in both its peer group and the broader market in recent years, with its stock price shedding more than 80 percent of its value compared with its five-year high of $101.43 in mid-2011.....

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