Cleveland-Cliffs verifies shareholder rejection of Harbinger's bid

By Susanna Moon

Chicago, Oct. 10 - Cleveland-Cliffs Inc. confirmed that a majority of its shareholders rejected Harbinger Capital Partners' control share acquisition proposal at a special meeting held on Oct. 3, according to an 8-K filing with the Securities and Exchange Commission.

Results by the independent inspector of elections, IVS Associates, Inc., showed that 51.3 million votes, or 65%, were against adopting Harbinger's proposal. More than 78.9 million shares were represented at the meeting, reflecting a turnout of about three-quarters of outstanding shares.

The proposal asked shareholders to allow Harbinger to acquire more than one-fifth but less than one-third of Cleveland-Cliffs shares outstanding.

"While pleased our shareholders voted to reject Harbinger's proposal, Cliffs recognizes it will face an uphill battle winning the two-thirds majority of shares outstanding required to complete its proposed transaction" with Alpha Natural Resources Inc., Joseph A. Carrabba, Cleveland-Cliffs chairman, president and chief executive officer, said in the filing.

"We continue to believe that, over the long-term, the transaction is in the best interest of shareholders and are hopeful the number required to approve the deal are convinced of the merits," Carrabba continued.

A shareholder meeting will be held in mid-November to vote on the proposed deal with Alpha.

In July, Cleveland-Cliffs agreed to acquire Alpha in cash and stock for $10 billion.

Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP directly and indirectly own a combined 15.57% of the company's total issued and outstanding shares, a prior news release said.

Cleveland-Cliffs, a mining company, produces iron ore pellets in North America and supplies metallurgical coal to the steelmaking industry. The company is based in Cleveland.

Alpha Natural Resources, located in Abingdon, Va., supplies Appalachian coal to the steel industry, electric utilities and other industries.

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