Exhibit A
Casablanca Capital Files Definitive Proxy
Statement and Sends Letter to Cliffs’ Shareholders
Urges Shareholders to Elect Six New, Highly-Qualified
Directors to Cliffs’ Board
New York – June 12, 2014 – Casablanca Capital LP, (“Casablanca”)
the beneficial owner of approximately 5.2% of Cliffs Natural Resources Inc. (NYSE: CLF), today filed its definitive proxy statement
with the Securities and Exchange Commission ("SEC") in connection with Cliffs’ 2014 Annual Meeting of Shareholders,
scheduled for July 29, 2014, and urged shareholders to vote for Casablanca’s six highly-qualified director nominees.
In conjunction with the filing, Casablanca issued a letter to stockholders
detailing its belief that Cliffs’ Board of Directors and executive leadership should be held accountable for the dramatic
erosion of value shareholders have suffered over the past three years and reiterating its call for a fundamental refocusing of
Cliffs’ strategy.
“Cliffs is at a critical juncture,” said Donald Drapkin,
Chairman of Casablanca. “The current Board has presided over an extended period of gross underperformance and poor decision
making that has led to significant shareholder value destruction. We have no confidence that the Board will take the steps needed
to maximize shareholder value, and firmly believe a reconstituted Board and a management team led by Lourenco Goncalves is vital
to the Company’s future success. We urge shareholders to elect six new, highly-qualified director nominees who can evaluate
the opportunities and challenges that face Cliffs with an open mind and a fresh perspective and implement a new strategic direction
for the Company. Casablanca’s nominees are fully committed to transparency, accountability and enhancing shareholder value.”
The full text of the letter and definitive proxy statement, which
can be found at www.fixcliffs.com along with other information about Casablanca’s investment in Cliffs, is as follows:
June 12, 2014
Fellow Cliffs Natural Resources Shareholders:
Casablanca Capital is one of Cliffs’ top five shareholders
with a 5.2% ownership interest. Since we began our campaign to create value for all of Cliffs’ shareholders late last year,
we have consistently emphasized that the Company is substantially undervalued as a result of strategic missteps, blatant mismanagement
and a misalignment of incentives between Cliffs’ shareholders and its Board of Directors and management.
As a result, Casablanca is submitting a slate of six highly-qualified
independent[1] nominees for election to Cliffs’
Board at its 2014 Annual Meeting of Shareholders. Each candidate brings the
[1] Douglas Taylor is
Co-Managing Member of Casablanca Capital and, as such, is not independent from Casablanca.
All of the Casablanca’s other five nominees are
independent of both Casablanca and the Company, and will not
receive any remuneration from Casablanca either for standing
for election or after assuming a position on Cliffs’
Board.
deep expertise and fresh perspective needed to reorient the Company
and develop strategies that will restore and maximize value.
Biggest Loser in 2013 and Losing Still More
Value in 2014
Three years ago, Cliffs’ shares traded above $100 per share.
Since that time, Cliffs’ has lost over 85% of its equity value, yet a majority of the current Board and nine-member slate
of directors up for reelection remains in place, including Chairman James Kirsch. For most of 2013, Cliffs held the title of "biggest
loser" in the S&P 500 (finishing the year in the #2 spot). Since January 2014, Cliffs’ share price has fallen a
further 45%, and the stock remained one of the most-shorted equities in the S&P 500 until it was dropped from the index effective
April 1, 2014.
Moreover, Cliffs has generated total negative returns to shareholders
over the past one-, three- and five-year periods of (16%), (81%) and (46%) respectively, vastly underperforming the S&P 500,
the major iron ore producers and the XME ETF that reflects the peer group referenced by Cliffs in its proxy materials.
Real Change Needed to Put Cliffs Back on
Track for Shareholders
A majority of the current Board and nine-member slate of Directors
up for reelection approved both the $4.9 billion Consolidated Thompson transaction to acquire the Bloom Lake project and the subsequent
$1.5 billion in capital expenditures. These ill-conceived investments were part of a broader diversification strategy that included
the Coal, Chromite, Wabush and Amapá projects for a total outlay of $9 billion. None of these projects currently contributes
one cent to earnings.
We believe Cliffs needs to refocus on its core U.S. Iron Ore business,
improve operating profitability and optimize capital allocation. The U.S. Iron Ore business, which has operated in some form for
over 165 years, has high strategic value and, we believe under the right leadership, should remain profitable even in a depressed
commodity pricing environment. Rather than recognize the need to reposition Cliffs and restore capital discipline, Mr. Kirsch and
his Board have only taken small, inadequate steps, primarily in response to pressure from Casablanca.
New Leadership Aligned with Shareholders
Can Refocus Cliffs and Restore Value
To effect the necessary change, Casablanca has proposed Lourenco
Goncalves as Cliffs’ senior-most executive officer, and has nominated a majority slate of six highly-qualified director candidates
for election to Cliffs’ Board.
Mr. Goncalves is a 30-year veteran of the metals and mining industry
and a proven value creator who brings deep experience with companies in the ferrous value chain and has both the strategic and
operational skills needed to effect urgent change and restore the fundamental value of Cliffs. Mr. Goncalves has made a personal
investment of $1.5 million in Cliffs, demonstrating his conviction that, with proper oversight and guidance, tremendous value can
be unlocked.
In contrast, the economic interests of the Board and management
do not sufficiently align with those of shareholders. Based on publicly-available information, only a single director has purchased
shares for cash, with the remainder simply receiving grants from the Company. Despite holding on to their seats for over 40 cumulative
years, the Board and top executives in the aggregate own or have an economic interest valued at less than $5 million at current
prices, and equivalent to less than 0.5%. Most shockingly, Chairman Mr. Kirsch has never invested even one dollar of his own money
in Cliffs’ shares and Chief Executive Officer Gary Halverson owns no shares.
Casablanca believes this de minimis ownership poorly aligns the
Board and management with shareholder interests and contributes to the irresponsible way in which the Company approaches key strategic
and financial decisions.
Our slate of directors comprises experienced professionals, with
considerable strategic, operating and financial experience to immediately add value.
| Nominee |
Key Qualifications |
| Lourenco Goncalves |
·
Hired as CEO of Metals USA in February 2003; took the company private in November 2005; IPO’d the Company in April
2010 and sold the Company to Reliance Steel & Aluminum in April 2013
· CEO of California Steel Industries from March 1998 to February 2003 |
| Rip Fisher |
·
Former Goldman Sachs Managing Director, Head of Mining and Head of Canadian Corporate Finance and Investment Banking
·
Former Director of CML HealthCare Inc. |
| Patrice Merrin |
·
Director of Stillwater Mining
·
Former Chairman of CML HealthCare Inc.
·
Director of Climate Change and Emissions Management Corp.
·
Former CEO of Luscar and Executive Vice President of Sherritt International |
| Joseph Rutkowski |
· Former Nucor Corporation Executive Vice President of Business Development |
| Gabriel Stoliar |
·
Managing Partner of Studio Investimentos, an asset management firm
·
Former Vale S.A. CFO and Executive Director of Planning and Business Development
·
Former BNDES Executive Director |
| Douglas Taylor |
·
CEO and Co-CIO of Casablanca Capital LP
·
Former Lazard Frères & Co and Wasserstein Perella Managing Director
·
Former Director and CFO of Sapphire Industrials |
Two Directors Would Be Inadequate to Effect
the Necessary Changes
In its most recent proxy statement, the Company indicated its intention
to nominate only nine directors out of an 11-member slate, stating it expects Casablanca to receive a minimum of two seats on the
Board. We believe this step constitutes a cynical attempt to limit Casablanca’s representation to an ineffectual minority.
This would preserve the status quo and severely limit the prospects for change needed to reverse the destruction of value. Casablanca
has no desire to “control” the Cliffs Board (nor could it, given that five of our six proposed nominees are independent
of Casablanca). We have only nominated a majority slate to ensure Mr. Goncalves is installed as the senior-most executive at the
Company. We believe effective leadership is the most critical component needed to drive operational improvements, strategic realignment,
and restoration of value. In fact, Casablanca was prepared to enter into a settlement agreement with three members on a nine-member
Board with Mr. Goncalves as Executive Chairman. Under this arrangement, Mr. Halverson would remain as CEO while reporting directly
to Mr. Goncalves, in the same manner as he reported to then-Executive Chairman Mr. Kirsch.
Return the GOLD Proxy Card Today to Protect
and Enhance the Value of Your Investment
To us, Cliffs needs a new strategic direction, starting with Board
members who are independent and accountable and who will immediately take action to drive meaningful improvements and create lasting
value. We urge you to do your part to effect change by signing, dating and returning the enclosed GOLD proxy card today.
If you have any questions or require assistance in submitting your
GOLD proxy card, please contact Okapi Partners at (212) 297-0720 or (877) 274-8654 (toll-free), or visit www.fixcliffs .com for
further information.
We appreciate your careful consideration and thank you for your
continuing support.
Very truly yours,
/s/ /s/ /s/
|
Donald G. Drapkin
Chairman |
Douglas Taylor
Chief Executive Officer |
Gregory S. Donat
Partner & Portfolio Manager |
437
Madison Avenue, 28th Floor
New
York, N.Y. 10022
(212)
297-0720
Stockholders
Call Toll-Free at: (877) 274-8654
E-mail:
info@okapipartners.com
About Casablanca Capital LP
Casablanca Capital is an Event Driven and Activist investment manager
based in New York, founded in 2010 by Donald G. Drapkin and Douglas Taylor. Casablanca invests in high quality but underperforming
public companies that have multiple levers to unlock shareholder value. The firm seeks to engage with the management, boards, and
shareholders of those companies in a constructive dialogue in order to enhance shareholder value through improved operational efficiencies,
strategic divestitures, capital structure optimization and increased corporate focus. In 2011, Casablanca successfully initiated
a campaign at Mentor Graphics Corporation to improve profitability and enhance value at the company, working with shareholders
to elect three nominees to Mentor’s Board.
Cautionary Statement Regarding Opinions and Forward-Looking Statements
Certain information contained herein constitutes “forward-looking
statements” with respect to Cliffs Natural Resources Inc. ("Cliffs"), which can be identified by the use of forward-looking
terminology such as “may,” “will,” “seek,” “should,” "could," “expect,”
“anticipate,” “project,” “estimate,” “intend,” “continue” or “believe”
or the negatives thereof or other variations thereon or comparable terminology. Such statements are not guarantees of future performance
or activities. Due to various risks, uncertainties and assumptions, actual events or results or actual performance may differ materially
from those reflected or contemplated in such forward-looking statements. The opinions of Casablanca Capital LP ("Casablanca")
are for general informational purposes only and do not have regard to the specific investment objective, financial situation, suitability
or particular need of any specific person, and should not be taken as advice on the merits of any investment decision. This
material does not recommend the purchase or sale of
any security. Casablanca reserves the right to change any
of its opinions expressed herein at any time as it deems appropriate. Casablanca disclaims any obligation to update the information
contained herein. Casablanca and/or one or more of the investment funds it manages may purchase additional Cliffs shares
or sell all or a portion of their shares or trade in securities relating to such shares.
# # #
Media Contacts:
Sard Verbinnen & Co
George Sard/Matt Benson
212-687-8080
Investor Contacts:
Okapi Partners
Bruce H. Goldfarb/Patrick McHugh/Lydia Mulyk
212-297-0720
CASABLANCA CAPITAL LP, DONALD G. DRAPKIN AND DOUGLAS TAYLOR
(COLLECTIVELY, “CASABLANCA") HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) A DEFINITIVE
PROXY STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN CONNECTION WITH THE SOLICITATION OF PROXIES FROM STOCKHOLDERS
OF CLIFFS NATURAL RESOURCES INC. (THE "COMPANY") IN CONNECTION WITH THE COMPANY'S 2014 ANNUAL MEETING OF STOCKHOLDERS.
ALL STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION
OF PROXIES BY CASABLANCA, ROBERT P. FISHER, JR., CELSO LOURENCO GONCALVES, PATRICE E. MERRIN, JOSEPH RUTKOWSKI AND GABRIEL STOLIAR
(COLLECTIVELY, THE "PARTICIPANTS") BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED
TO THE PARTICIPANTS. THE DEFINITIVE PROXY STATEMENT AND AN ACCOMPANYING PROXY CARD WILL BE FURNISHED TO SOME OR ALL OF THE COMPANY'S
STOCKHOLDERS AND ARE, ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV.
IN ADDITION, OKAPI PARTNERS LLC, CASABLANCA'S PROXY SOLICITOR, WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING
PROXY CARD WITHOUT CHARGE UPON REQUEST BY CALLING (212) 297-0720 OR TOLL-FREE AT (877) 274-8654.
INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR
DIRECT OR INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN THE DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A FILED BY CASABLANCA
WITH THE SEC ON JUNE 12, 2014. THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE.
