Cliffs Natural Resources Inc announced that RiskMetrics Group has recommended to institutional clients that they vote against a proposed merger of Spider Resources Inc and KWG Resources Inc.

RiskMetrics is an independent proxy advisory firm relied upon by major institutional, investment firms, mutual funds and fiduciaries throughout North America. Its recommendation cites the higher value available to Spider shareholders from Cliff’s all cash offer of CAD 0.19 per share.

RiskMetrics said that a vote against is warranted because, in particular, CLF’s all cash offer price exceeds and SPQ is currently trading above, the price implied by the exchange ratio provided by the Merger.

Mr William C Boor president of Cliffs’ Ferroalloys business unit said that “We welcome RiskMetrics’ recommendation and urge Spider shareholders to consider it and vote the yellow proxy against the proposed Merger. RiskMetrics conclusion agrees with the determination of Spider’s Board of Directors and Spider’s largest shareholder that Cliffs’ offer is superior.”

RiskMetrics stated that CLF’s entire cash offer provides value certainty. Furthermore, CLF has locked up Spider's largest shareholder who has agreed to support the bid and vote against the Merger unless a competing all-cash proposal at 10% premium to CLF’s latest offer emerges. In the circumstances, a vote against the Merger is warranted.

Cliffs agrees with RiskMetrics that Cliffs' All Cash Offer is worth more than the proposed Merger. On May 21st 2010, the day prior to Cliffs’ announcement that it intended to bid for both Spider and KWG, the combined market capitalization of Spider and KWG was only approximately CAD 85 million. Cliffs’ All Cash Offer of CAD 0.19 per share for only Spider is CAD 125 million in aggregate indicating that even if KWG offered Spider shareholders 100% of a merged Spider KWG, Spider shareholders would receive far superior value by opting for Cliffs’ All Cash Offer.