Steel Industry Showdown: Activist Investor Takes Aim at U.S. Steel’s Board
In a bold move, activist investor Ancora has put forth a slate of nine candidates to replace top executives on U.S. Steel’s board of directors, including CEO David Burritt. The investor, which holds a 0.18% stake in the company, is seeking to derail the American steelmaker’s $14.9 billion merger deal with Japan’s Nippon Steel.
A New Leader Emerges
At the helm of Ancora’s proposed changes is Alan Kestenbaum, former CEO of Canada’s Stelco, which was acquired by Cleveland-Cliffs in a $2.8 billion deal last year. Kestenbaum’s experience in the industry makes him a strong contender to lead U.S. Steel in a new direction.
A History of Dealings
However, U.S. Steel has expressed concerns about Ancora’s motivations, citing the investor’s recent dealings with Cleveland-Cliffs, which had previously proposed to acquire U.S. Steel. The Pittsburgh steelmaker ultimately accepted a higher offer from Nippon Steel, but Ancora claims it is not interested in selling the company to another party, including Cleveland-Cliffs.
Breakup Fee in Sight
Instead, Ancora is seeking to secure a $565 million breakup fee from Nippon Steel. This move has sparked tension, with U.S. Steel’s shares down 1.6% in premarket trading.
A Complex Web of Deals
The situation is further complicated by Cleveland-Cliffs’ recent partnership with Nucor to propose an all-cash bid for U.S. Steel. This development comes after former U.S. President Joe Biden blocked Nippon Steel’s bid on national security grounds.
The Battle for Control
As the drama unfolds, one thing is clear: the future of U.S. Steel hangs in the balance. Will Ancora’s proposed changes pave the way for a new era of leadership, or will the company remain committed to its merger deal with Nippon Steel? Only time will tell.
Leave a Reply