An asset manager is seeking to oust the US steelmaker’s leadership after Nippon Steel canceled its acquisition of US Steel and took a stake in the company.
Ancora is opposed to US Steel’s deal with Nippon and believes the company’s board and CEO David Burritt prioritized the deal because they would receive more than $100 million if it went ahead.
Nippon Steel and US Steel filed a federal lawsuit earlier this month challenging the Biden administration’s decision to block Nippon’s proposed $15 billion takeover of the Pittsburgh company, citing national security.
Ancora is seeking an independent list of directors at US Steel and a new CEO who is committed to walking away from the Nippon deal. In an open letter on Monday, the company said it has nominated nine independent directors for election at US Steel’s annual shareholders meeting this year. Those directors have a plan that includes making Alan Kestenbaum, former chairman and CEO of Stelco, the new CEO of U.S. Steel.
Ancora wants the new board members to focus on the turnaround of US Steel, not on trying to find alternative bidders or sell the company. It also wants them to pass on a breakup fee of $565 million.
“US Steel is now in dire straits due to its excessive capital spending, high debt, soft earnings and non-existent contingency planning,” Ancora wrote.
“The consequences of out-of-touch leadership are associated with weak participation in local communities. Absent a miracle, Ancora believes a substantial and immediate restructuring of the company’s leadership is necessary,” it continued.