Donald Drapkin and Douglas Taylor’s Casablanca Capital Goes Activist on Cliffs Natural Resources Inc (CLF)

Casablanca Capital LP, led by Douglas Taylor and Donald Drapkin boosted its stake in Cliffs Natural Resources Inc  (NYSE:CLF) to 5.2% of the company. Casablanca now holds 7.9 million shares of the company, with 7.5 million of the shares acquired in the last 60 days. The stock currently trades at $ 20.79, and lost nearly 25% so far in 2014. According to a 13 D filing by Casablanca Capital LP, the fund bought 7.5 million shares at around $25.1.

There are other hedge fund managers who have been bullish on Cliffs Natural Resources Inc (NYSE:CLF). John A. Levin’s Levin Capital Strategies has the second most shares of CLF among the hedge funds we track. Levin Capital Strategies has 2.8 million shares of Cliff in its portfolio, with a dollar value of $ 59.1 million. However, Levin decreased his position in the stock by 20% in the last reported quarter. Israel Englander’s Millennium Management has $ 42 million put position in Cliffs Natural. The stock experienced some insider sales and purchases in 2013. According to the filings, the firm has experienced 0.12 million insider sales in a total of 10 sale transactions. On the other hand, insiders bought 0.012 million shares in 2 transactions.

Casablanca Capital was established by Donald Drapkin and David Taylor in 2012. It is an activist fund and event driven fund specializing in mid-cap companies. Prior to Casablanca Capital, Donald Drapkin worked for MacAndrews & Forbes, a firm specializing in acquisitions.

Cliffs Natural Resources Inc. (NYSE:CLF), a mining and natural resources company engaging in the production of iron ore and metallurgical coal, is the target of Casablanca Capital’s activist campaign. Casablanca Capital wants the firm spin off some units, double its dividend and convert it U.S. assets to a an MPL among other things. Here is Casablanca’s letter to Cliffs Natural’s board, dated January 27,2014: