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NY Hedge Fund Pushes for Change at Iron Ore Producer

Jan 28, 2014
Jing Chen

New York-based hedge fund firm Casablanca Capital is urging iron ore producer Cliffs Natural Resources to spin off its international operations, according to a report by Reuters.

Casablanca is pushing Cleveland-based Cliffs Natural to consolidate its Bloom Lake mine together with the rest of its Eastern Canadian assets and its Asia-Pacific business to create Cliffs International, according to a letter the hedge fund addressed to Cliffs executive chairman James Kirsch.

Casablanca called Cliff Natural’s international business “riskier” than its domestic operations, and also suggested that the company should “significantly cut costs, double its dividend and convert its U.S. assets to a master limited partnership.”

Cliffs’ shares rose as much as 13% after the news hit the media; the letter was dated October 27 in a filing with the Securities and Exchange Commission.

Casablanca owns an approximately 5.2% stake in Cliffs Natural.

 

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