An asset manager is seeking to quash Nippon Steel's takeover of U.S. Steel and oust the leadership of the U.S. steelmaker after taking a stake in the company.
Ancora is opposed to U.S. Steel’s agreement with Nippon and believes that the company’s board and CEO David Burritt have prioritized getting the deal done because they stand to receive more than $100 million if it goes forward.
Earlier this month Nippon Steel and U.S. Steel filed a federal lawsuit challenging a Biden administration decision to block Nippon’s proposed $15 billion acquisition of the Pittsburgh company citing national security.
Ancora is seeking an independent slate of directors at U.S. Steel and new CEO that are committed to walking away from the Nippon deal. In an open letter on Monday, the firm said it has nominated nine independent directors for election at U.S. Steel's annual shareholders meeting this year. Those directors have a plan that includes making Alan Kestenbaum, former Chairman and CEO of Stelco, U.S. Steel's new CEO.
Ancora wants new board members to focus on U.S. Steel's turnaround, not trying to find alternative bidders or selling the company. It also wants them to pursue the $565 million breakup fee.
“U.S. Steel is now in a dire state due its excessive capital spending, high debt, soft earnings and nonexistent contingency plan,” Ancora wrote.
“There are consequences associated with having out-of-touch leadership with weak involvement in local communities. Absent a miracle, Ancora believes a substantial and urgent reconstitution of the company’s leadership is necessary,” it continued.
U.S. Steel, based in Pittsburgh, said early Monday that it remains committed to pursuing a deal with Nippon.
“We remain confident that our partnership with Nippon Steel is the best deal for American steel, American jobs, American communities and American supply chains,” the company said in a prepared statement. “With Nippon Steel, U. S. Steel remains an American company and its headquarters will stay in Pittsburgh, its iconic name will not change, and its products will remain mined, melted and made in America.”
Michelle Chapman, The Associated Press
