In computer networks, a proxy server is a server (a computer system or an application program) which services the requests of its clients by forwarding requests to other servers. A client connects to the proxy server, requesting some service, such as a file, connection, web page, or other resource, available from a different server. The proxy server provides the resource by connecting to the specified server and requesting the service on behalf of the client. A proxy server may optionally alter the client's request or the server's response, and sometimes it may serve the request without contacting the specified server. In this case, it would 'cache' the first request to the remote server, so it could save the information for later, and make everything as fast as possible. A proxy server that passes all requests and replies unmodified is usually called a gateway or sometimes tunneling proxy. A proxy server can be placed in the user's local computer or at specific key points between the user and the destination servers or the Internet.

22 September 2008

Miner Gets Proxy Nod in HF Battle

Proxy advisory firm PROXY Governance Inc. (PGI) is siding with the management of mining company Cleveland-Cliffs in its battle with hedge fund Harbinger Capital Partners.

Harbinger, which owns about 15.6 percent of Cleveland-Cliffs, has sought permission to increase its stake to more than 20 percent of the company. Even if the fund does get approval, it will still not be allowed to hold more than a third of the company.

Last month, however, Cleveland-Cliffs asked shareholders to reject the proposal. Management has clashed with Harbinger over the company's bid to acquire Alpha Natural Resources, a move Harbinger opposes. Instead, the fund has suggested Cleveland-Cliffs should consider putting itself up for sale.

On Friday, PGI backed management, issuing an 11-page report on the matter. The proxy advisor noted Harbinger has not proposed to pay any control premium as part of its acquisition of more shares, and yet the fund would effectively gain the ability to block the Alpha deal.

"Because the proposed control share acquisition could give Harbinger effective veto power over certain corporate strategies and strategic transactions, but offers shareholders neither a control premium not a discernable economic or strategic advantage they would not otherwise realize, we recommend shareholders reject the proposal," the PGI report concluded.

In its own letter to shareholders on Friday, Harbinger in essence agreed with the idea that its proposal is about the Alpha takeover. Harbinger called the deal with Alpha "too much, too fast." The issue will be resolved at the company's shareholders meeting on Oct. 3.

Legendary investor Philip Falcone founded Harbinger in 2001. The fund has more than $21 billion in assets under management. It has recently disclosed stakes in RTI International, AK Steel Holding Corp. and Media General Inc.

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