Timken Co. is fighting fire with fire regarding a shareholder proposal to split the company in two.
Or, as is the case, the Canton steel and bearings maker is fighting website with website.
Timken on Monday unveiled a new site, TimkenDrivesValue.com, to restate its case that activist shareholders are mistaken in wanting to divide the company into separate steel and bearings businesses. The company also updated an investor presentation ahead of the company’s May 7 shareholders meeting.
Activist shareholders Relational Investors and the California State Teachers Retirement System last week showed off a website, www.UnlockTimken.com. The site collected investor presentations, news releases, news stories and more on the shareholders’ push to split up Timken. Relational and CalSTRS, which own nearly 7.3 percent of Timken shares, have a nonbinding shareholders resolution on their proposal that goes before shareholders at next month’s annual meeting.
The two California-based shareholders on Monday, meanwhile, called Timken’s new website and revised presentation “highly flawed and misleading.”
In another development, Reuters news service reported that Timken will meet with Relational and CalSTRS representatives today.
Timken on Monday said its new website contains material supporting its board’s recommendation that shareholders vote against the proposal to spin off its steel business. The company said that Relational and CalSTRS are using a flawed analysis to justify splitting the company.
Timken said the two shareholders did not show that spinning off the steel business would cost about $200 million with another $60 million to $80 million in lost “annual synergies.” That would result in one-time costs and “lost synergies” of $6 to $8 per share, Timken said its analysis shows. Timken said its board and management have a comprehensive plan to increase shareholder value.
“The materials released today [Monday] are critical to aid Timken shareholders in developing a clear understanding of the flaws in the proposal from CalSTRS and Relational Investors as well as the tremendous value we believe is created by our integrated business model,” Timken said in a statement. “We urge shareholders not to be misled by CalSTRS and Relational Investors and support the Timken strategy to deliver long-term value for shareholders by voting against the proposal.”
Timken’s updated investor presentation is available at the new website and also was filed with the Securities and Exchange Commission, www.sec.gov.
Relational and CalSTRS criticized Timken in a news release.
Ralph Whitworth, Relational’s founder, said in a statement, “It is shocking that Timken would underestimate its shareholder’s intelligence by using such erroneous analysis as justification to not unlock value for Timken shareholders. In our numerous conversations with many of Timken’s largest shareholders, there is a consensus view that the company should spin off the steel business.”
Whitworth in part said that Timken’s synergies analysis “is highly flawed and contrived.” Also, the two shareholders do include the approximate $200 million cost to spin off the steel business as part of its own analysis, he said.
“Finally, it is not in shareholders’ best interests for Timken to be trying to muddy the waters. We are confident that shareholders understand the facts and will vote for CalSTRS proposal to unlock value for all shareholders through the separation of Timken’s steel and bearings businesses,” Whitworth said.
Jim Mackinnon can be reached at 330-996-3544 or email@example.com.