US Steel Investor Pentwater Opposes Ancora’s Proxy Proposal
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The third-largest investor in United States Steel Corp. said it opposes moves by activist investor Ancora Holdings Group to shake up the board of the iconic American steelmaker.
Pentwater Capital Management LP said it supports U.S. Steel’s current board and management, rejecting Ancora’s efforts to overhaul the steelmaker’s board and oust CEO David Burritt.
“Pentwater believes U.S. Steel’s board and management team are making the correct strategic decision for the company and Pentwater will not support the dissident slate of directors,” Matt Halbower, founder and CEO of the investment management firm, said Jan. 28 in a phone interview.
Ancora aims to force U.S. Steel to abandon a $14.1 billion takeover by Nippon Steel Corp. — a deal the steelmakers are fighting to save after being blocked by the White House. The activist investor has nominated nine candidates for U.S. Steel’s board including industry veteran Alan Kestenbaum, who would become CEO. Kestenbaum, the former head of Stelco Holdings Inc., went public Jan. 27 about plans to “fix” U.S. Steel.
Kestenbaum
There’s no guarantee Kestenbaum will ever see the inside of the U.S. Steel boardroom let alone become its next CEO. Ancora holds 0.18% of the outstanding shares in the Pittsburgh-based steelmaker, and it will need to convince existing shareholders that the plan is worth it.
Pentwater holds an 8.9% stake in U.S. Steel as of September, according to data compiled by Bloomberg, making it the third-largest investor, after Blackrock Inc. and Vanguard Group Inc. The Naples, Fla.-based manager is among investors that piled in to U.S. Steel in late 2023 amid speculation that the steelmaker would sell to a competitor at a premium.
U.S. Steel investors have weathered a turbulent 18 months since the company launched a strategic business review, a process that sparked a bidding war ultimately won by Nippon Steel with a $55-a-share all-cash offer in December 2023. The offer by the Japanese steelmaker became a political flashpoint during a U.S. election year.
Former President Joe Biden blocked the deal on national security grounds earlier this month, prompting the steelmakers to pursue legal measures to rescue the deal.
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