I know that on the surface it looks like SPQ is more valuable than KWG. After all, Cliffs is offering more.

But deep down inside, remember that each company has the same share of Big Daddy. And KWG has the two other key items that SPQ doesn't possess, namely the NSR and right-of-way. So therefore, even though it may not be apparent in the share price, KWG is worth more in sum than SPQ. The only slight concession is that SPQ does have a slightly lower fully-diluted share base.

The only reason that Cliffs is focusing on SPQ is because they believe that it is the weaker link. Although the vote in favor of the merger is far from certain, I think that Cliffs has underestimated in one key area: a very significant portion of owners of SPQ also own shares of KWG. I don't believe that Cliffs knew how much this move would insult most retails.

It's as if they are saying that you have to pick between your son and your daughter.