An asset management company is trying to block Nippon Steel's acquisition of U.S. Steel and oust the executives of the U.S. steelmaker that acquired the company's stock.
Ancora Holdings Group, which has assets of $10 billion, reported it has acquired a 0.18% stake in the Pittsburgh company. The paper announced Monday that U.S. Steel CEO David Barritt and the company's board are prioritizing a sale to Made in Japan, which could fetch more than $100 million if it goes through.
President Joe Biden this month blocked the roughly $15 billion takeover, confirming an earlier pledge to block the takeover of Steeltown USA's best-known steel company.
But the deal isn't over yet. The deadline to cancel the acquisition plan was extended by the Biden administration, and this month U.S. Steel and Nippon Steel challenged Biden's decision in a federal lawsuit.
Ancora is searching for an independent board member for U.S. Steel and a new CEO as it works to exit its contract with Japan. The company announced in an open letter Monday that it has nominated nine independent directors for election at this year's U.S. Steel annual shareholder meeting. The directors have plans that include installing former steel executive Alan Kestenbaum as U.S. Steel's new CEO.
Ancora wants the new board to focus on turning around U.S. Steel rather than selling it. It is also seeking a penalty of $565 million from Japan.
“U.S. Steel is currently in dire straits due to excessive capital spending, high debt, low profits, and non-existent contingency plans,” Ancora wrote.
The departure of the Biden administration does not necessarily increase the chances of reaching an agreement with Japan. President Donald Trump has consistently voiced opposition to the deal, questioning why U.S. Steel would sell out to a foreign company given the new tariffs he has promised.
“We believe that President Trump, a principled businessman elected by middle-class and working-class voters, is contradicting his self-proclaimed 'America First' policies and attempting to ignore the opposition of the United Steelworkers.” There's no reason. ” Ancora said Monday.
U.S. Steel said it remains committed to pursuing an agreement with Japan because it believes it is in the best interest of the U.S. steel industry, supply chain and steelworkers.
It also raised previous allegations that rival steelmaker Cleveland-Cliffs had tried to block a merger with Japan. U.S. Steel has accused the Ohio steelmaker, its CEO Lorenco Goncalves, and United Steelworkers president David McCall of “a series of anti-competitive actions” to block the deal. A separate federal lawsuit alleges that the company engaged in “coordinated and extortion-based activities.” .
U.S. Steel said, “Ancora's interests are not aligned with all U.S. Steel shareholders.” “Transferring control of the company to Ancora would not be in the best interests of our stockholders. We also believe that Mr. Ancora and Alan Kestenbaum recently engaged in a transaction with the Cleveland-Cliffs, which made an unsuccessful bid. We are also concerned about the motives behind these appointments.”
Ancora is also based in Cleveland.
U.S. Steel rejected a bid from the Cleveland Cliffs in favor of an offer from Nippon Steel in 2023. Gonsalves of the Cleveland Cliffs said this month that he would like to make a new bid for U.S. Steel.
U.S. Steel stock fell more than 1% on Monday.
