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Iron ore giant Cleveland-Cliffs
Inc. didn't seek approval from its largest shareholder before going out and proposing to
spend $10 billion on coal producer Alpha Natural Resources Inc. And now the would-be buyer could be a target.
The Wall Street Journal is reporting that Phil Falcone, head of hedge fund Harbinger Capital and an 18% stakeholder in Cleveland-Cliffs, is not too happy with the deal and would rather see Cleveland-Cliffs take advantage of the global steel boom and put itself up for sale.
"Mr. Falcone reckons Cleveland-Cliffs could fetch as much as $130 a share, or about $14 billion, according to a person close to Harbinger. Harbinger hired Moelis & Co., a mergers-and-acquisitions boutique, as its adviser," the WSJ wrote. Possible suitors for Cleveland could be international players like Russia's OAO Severstal, if they can raise the cash, or Luxembourg-based ArcelorMittal, the world's largest steelmaker by revenue. Domestic bidders could include Nucor Corp. and U.S. Steel Corp. "We believe our growth strategy exceeds any value we would get for the shareholders," Cleveland-Cliffs chief executive Joseph Carrabba told the paper and declined to comment on whether the company had already been approached. Harbinger filed a statement with the Securities and Exchange Commission on July 17, saying the purchase is not in the best interest of shareholders and it may try to influence the board's future plans. - Donna Block See Wall Street Journal item See related: Harbinger opposes Cleveland-Cliffs deal See SEC filing Categories Deal Video
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