Harbinger asks Cleveland-Cliffs shareholders to approve proposed control share acquisition on Oct. 3

By Lisa Kerner

Charlotte, N.C., Aug. 28 - Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP asked Cleveland-Cliffs Inc. shareholders to vote in favor of a proposed control share acquisition at the special meeting on Oct. 3. Record date for the meeting is Sept. 2.

Harbinger proposes acquiring a number of Cleveland-Cliffs shares that, when added to its current share ownership, would equal at least one-fifth but less than one-third of the company's voting power, according to a schedule 13D filed with the Securities and Exchange Commission.

Cleveland-Cliffs' board of directors unanimously recommended that shareholders vote against the measure, it was previously reported.

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.

Cleveland-Cliffs said approval of the proposed control share acquisition requires an affirmative vote of the holders of a majority of Cleveland-Cliffs' voting power entitled to vote in the election of directors represented in person or by proxy at the special meeting.

Harbinger opposes Alpha Natural Resources deal

According to Harbinger, "Cleveland-Cliffs is a company with tremendous potential, but one greatly in need of a strong, independent voice that is committed to maximizing shareholder value," it was reported in a schedule 14A filed with the Securities and Exchange Commission.

Harbinger believes Cleveland-Cliffs' plan to acquire Alpha Natural Resources, Inc. in a $10 billion cash and stock transaction is not in the best interest of Cleveland-Cliffs' shareholders.

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.

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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