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鈥檚 agreement with Nippon and believes that the company鈥檚 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 and U.S. Steel filed a federal lawsuit challenging a Biden administration Nippon鈥檚 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.
鈥淯.S. Steel is now in a dire state due its excessive capital spending, high debt, soft earnings and nonexistent contingency plan,鈥� Ancora wrote.
鈥淭here 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鈥檚 leadership is necessary,鈥� it continued.
U.S. Steel, based in Pittsburgh, said early Monday that it remains committed to pursuing a deal with Nippon.
鈥淲e remain confident that our partnership with Nippon Steel is the best deal for American steel, American jobs, American communities and American supply chains,鈥� the company said in a prepared statement. 鈥淲ith 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.鈥�
Michelle Chapman, The Associated Press
