Two weeks ago, Cliffs Natural Resources (NYSE:CLF) pushed out its shareholder vote on a merger with Alpha Natural Resources (NYSE:ANR) to mid-December. Alpha promptly filed suit, seeking to force Cliffs to stick to its agreed upon date of November 19th.
It doesn’t matter anymore. The two companies issued a press releaseafter the market closed yesterday announcing that the merger agreementwas terminated. The companies cited "the current macroeconomicenvironment, uncertainty in the steel industry, shareholder dynamicsand risks and costs of potential litigation" as reasons for thetermination.
No kidding. The value of the deal had dropped by about 60%, and majorshareholders in Cliffs had been fighting the deal ever since itwas announced. Cliffs shares jumped nearly 6% in after-hours trading onthe news, while Alpha shares dropped more than 7%.
November 18, 2008