Ancora Pushes for US Steel Board Overhaul, Nippon Deal Abandonment
Activist investor Ancora Holdings Group has nominated nine candidates for United States Steel Corp.'s board, advocating for the company to abandon a proposed takeover by Nippon Steel Corp.
Nominees and Strategy:
* Ancora seeks to replace current CEO David Burritt with former Stelco Holdings Inc. CEO Alan Kestenbaum.
* Ancora intends to terminate US Steel's litigation aimed at resurrecting the Nippon Steel deal and instead pursue a $565 million breakup fee.
Justification:
* Ancora cites a lack of legal precedent for the ongoing lawsuits.
* The group believes President Biden's previous blocking of the deal on national security grounds renders its approval unlikely.
Company Response:
* US Steel expressed confidence in its Nippon Steel partnership.
* Shares of US Steel declined in early trading on Monday.
Ancora's Involvement:
* Ancora holds a 0.18% stake in US Steel.
* Kestenbaum plans to invest in the company.
* Ancora has a history of successful proxy campaigns in the industrial and transportation sectors.
Additional Context:
* Cleveland-Cliffs Inc. and Nucor Corp. are reportedly exploring a joint bid for US Steel.
* Kestenbaum successfully restructured Stelco after acquiring it from US Steel bankruptcy.
Conclusion:
Ancora's push for a board overhaul and Nippon deal abandonment reflects its belief in US Steel's potential as an independent entity. The company's response suggests a continued commitment to the Nippon Steel partnership.