UPDATE 2-Hedge fund triumphs in proxy battle with U.S.-based miner Cliffs
(Rewrites throughout with details from meeting, analyst view, background)
By Kim Palmer
CLEVELAND, July 29 (Reuters) - Casablanca Capital triumphed on Tuesday in its proxy battle with miner Cliffs Natural Resources Inc, preliminary estimates show, putting the hedge fund in a position to replace Cliffs' chief executive and sell off underperforming assets.
Shareholders of Cleveland-based Cliffs voted onto the miner's board all six nominees put forward by Casablanca, the New York-based fund said, citing estimates from its proxy solicitor. That means they will make up a majority of the 11-person board.
Cliffs CEO Gary Halverson said at the company's well-attended annual meeting in Cleveland that because of the contested nature of the elections, the results would be announced in the next three business days.
Shares in Cliffs, a producer of iron ore and metallurgical coal, jumped as much as 10.4 percent to $18.33 on the New York Stock Exchange.
The vote outcome "is a culmination of years of frustration on behalf of shareholders," said Garrett Nelson, a mining research analyst at BB&T Capital Markets.
Casablanca began a proxy fight in March against Cliffs, of which it owns 5.2 percent, accusing the miner of destroying shareholder value through an ill-conceived expansion strategy. Cliffs shares have fallen about 85 percent in the past three years, at a time when iron ore and coal prices have plunged.
The vote by Cliffs shareholders has "sent a resounding message of support for our efforts to drive meaningful change at Cliffs, bring true accountability to the company's leadership, and restore shareholder value," Casablanca Chairman Donald Drapkin said in a statement. Continued...