Casablanca Capital Calls Cliffs’ Proposed Changes “Inadequate”

Casablanca Capital LP, one of Cliffs Natural Resources Inc.’s (NYSE:CLF) biggest shareholders, said yesterday that it is in favor of Lourenco Goncalves filling the currently open position of CEO at Cliffs.
Donald Drapkin, chairman of Casablanca, also described company changes recently announced by Cliffs as a “knee-jerk response to our call for change.”
Drapkin continued on to say:

We believe [the changes announced] are inadequate to address Cliffs’ issues, including the need for dramatic cost savings, and do not demonstrate the strong leadership needed to create substantial value for shareholders. In spite of its public statements, Cliffs hasn’t engaged us in any meaningful dialogue on the issues we’ve raised or provided a timetable for doing so.
The sad truth is that shares of Cliffs have lost more than 80% of their value since mid-2011. The Company’s actions to date have confirmed our lack of faith in the ability of the current Board and management team to reverse the deterioration in Cliffs’ financial performance. We are therefore calling for the business to be refocused under a dynamic and experienced CEO, Lourenco Goncalves, supported by a significantly reconstituted Board of Directors. We are confident Mr. Goncalves will bring the strategic and operational skills needed to effect urgent change and restore the fundamental value we see in Cliffs. We will shortly announce a slate of highly qualified Board nominees to oversee this effort.

Click here to read the full Casablanca Capital LP press release.