Merger of Cleveland-Cliffs, Alpha Natural Resources clears waiting period hurdle

By Lisa Kerner

Charlotte, N.C., Aug. 25 - The Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period in the proposed merger of Cleveland-Cliffs Inc. and Alpha Natural Resources, Inc.

In July, Cleveland-Cliffs agreed to acquire Alpha Natural Resources in a cash and stock transaction valued at approximately $10 billion.

The merger transaction remains subject to approval by Cleveland-Cliffs shareholders and Alpha Natural Resources stockholders. Cleveland-Cliffs shareholders are set to vote Oct. 3.

Under the companies' definitive merger agreement, Alpha Natural Resources stockholders will receive 0.95 shares of Cleveland-Cliffs common stock and $22.23 in cash for a total value of $128.12 per Alpha Natural Resources share.

Total consideration comprises $1.7 billion in cash and about 71 million new shares of Cleveland-Cliffs common stock, a prior company news release said.

Company shareholders Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP are opposed to the acquisition. The investors filed an acquiring person statement seeking a shareholder vote to allow Harbinger to boost its ownership to a total equal to at least one-fifth but less than one-third of the company's voting power, it was previously reported in a schedule 13D filed with the Securities and Exchange Commission.

Currently the Master Fund directly and indirectly owns 9 million shares, or 8.43%, of Cleveland-Cliffs. The Special Fund directly and indirectly owns 7,616,472 shares, or 7.14%, of the company's total issued and outstanding shares, it was noted in the filing.

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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