Activist investor Ancora has nominated nine candidates for U.S. Steel¡¯s board and is pushing for the company to abandon a takeover by Nippon Steel, according to people familiar with the matter.
Ancora¡¯s nominees include former Stelco Chief Executive Officer Alan Kestenbaum, said the people who asked not to be identified because the information was private. Ancora wants Kestenbaum to also replace current U.S. Steel CEO David Burritt, they said.
The Cleveland-based activist investor intends to push U.S. Steel to end litigation aimed at rescuing the Nippon Steel deal and instead collect a $565 million breakup fee, the people said.
It wasn¡¯t clear how big of a stake Ancora has built in the Pittsburgh-based steelmaker. Ancora and its slate want U.S. Steel to pursue a standalone turnaround rather than a sale, the people said.
A representative for U.S. Steel didn¡¯t immediately respond to a request for comment. A spokesperson for Ancora declined to comment. Ancora¡¯s stake and plan were reported earlier by the Wall Street Journal.
Before leaving office this month, President Joe Biden blocked Nippon Steel¡¯s $14.1 billion takeover of U.S. Steel on national security grounds. The companies subsequently filed a pair of lawsuits in a last-ditch effort to preserve the merger.
President Donald Trump, who also opposes the takeover by the Japanese company, has said on his social media platform, Truth Social, that tariffs will make U.S. Steel ¡°a much more profitable and valuable company.¡±
Cleveland-Cliffs was among several steelmakers that participated in an auction for U.S. Steel in 2023 before being outbid by Nippon Steel. Cleveland-Cliffs is now partnering with Nucor to weigh a potential joint bid for U.S. Steel.
Ancora has focused on campaigns at industrial and transportation companies. In recent years, it has secured board seats at Berry and Norfolk Southern.
The investor believes the U.S. Steel board has let down shareholders by choosing a bid from a foreign buyer for only $1 a share more than the $54-a-share bid from domestic suitor Cleveland-Cliffs, the people familiar with the matter said.
The board has also let the company exceed capital expenditure estimates, miss earnings targets and underperform peers throughout the transaction process, the people added.
Ancora, they said, expects long-term shareholders to rally behind Kestenbaum, who bought Stelco out of bankruptcy from U.S. Steel and completed a turnaround of the company after an initial public offering.
In July, after losing the bidding for U.S. Steel, Cleveland-Cliffs agreed to buy Stelco for about C$3.85 billion ($2.7 billion).
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