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* Says offered to let Casablanca appoint two independent directors
* Says a third director was to have been appointed by mutual agreement
* Says postponing record date for annual shareholder meeting
* Casablanca denies making a postponement request
March 7 (Reuters) - The war of words between Cliffs Natural Resources Inc and Casablanca Capital escalated on Friday, after the activist investor rejected an offer to end a proxy battle to win control of the iron ore miner's board.
Casablanca, Cliffs' fifth-largest shareholder with a 5.2 percent stake, wants Chief Executive Gary Halverson gone, and the company to spin off its "riskier" international operations from cash-generating U.S. assets.
The hedge fund, which started its campaign in January, nominated six directors for election to Cliffs' 11-member board on Thursday.
Cliffs had offered to let Casablanca appoint two independent directors and a third director was to have been appointed on mutual agreement, the company said in a statement issued early Friday morning.
Cliffs also said it acceded to Casablanca's request to postpone the May 13 record date - the date on which an investor must own shares to be entitled to vote - for its annual meeting.
Casablanca, however, issued a statement later in the day denying making such a request.
"The board that owns virtually no shares and has presided over an 80 percent value destruction is in our view showing its true colors by indefinitely postponing a shareholder vote and falsely suggesting that the delay was advocated by Casablanca," the fund said.
Cliffs returned with a statement late on Friday saying the suggestion to postpone the record date was made by Casablanca Chairman Donald Drapkin in a telephonic conversation with Cliffs' Chairman, James Kirsch.
Cliffs, which is yet to set a new date for the meeting, said it was ready to engage with Casablanca.
Cliffs shares have fallen 81 percent in a little more than two-and-half years. They closed down 2.3 percent lower at $18.65 on Friday on the New York Stock Exchange.
The company has been hit by weak iron ore prices and higher-than-expected costs at its Bloom Lake mine in Quebec, Canada - once seen by analysts as a key growth prospect.
Cliffs appointed Gary Halverson chief executive last month and said it would indefinitely suspend a planned expansion at Bloom Lake and shut another mine in Canada, cutting about 500 jobs
Casablanca has said it wants former Metals USA CEO Lourenco Goncalves to head Cliffs. Goncalves is part of Casablanca's slate of nominees to Cliff's board, along with the fund's CEO Douglas Taylor.
Casablanca's attempt to seek majority of seats on Cliffs' board is likely to meet with a greater degree of scrutiny from proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis, who typically apply stricter tests when assessing majority slates put forward by activist investors.
Proxy advisory firms advise large institutional investors ahead of shareholder votes and their reports very often sway votes for or against management in proxy battles.