After the United States blocked Nippon Steel’s bid for U.S. Steel, the Pittsburgh company is facing new pressure from an activist investor who is seeking to oust its leadership and thwart the companies’ efforts to revive the deal.
The activist investor, Ancora, said in an open letter to U.S. Steel’s board on Monday that it has nominated nine directors, including Alan Kestenbaum, the former chairman and chief executive of Stelco Holdings.
Stelco last year was acquired by the Cleveland- Cliffs, which is considering its own bid for U.S. Steel. Ancora wants Mr. Kestenbaum to replace U.S. Steel’s chief executive, David Burritt, and formally end talks with Nippon.
Shares of U.S. Steel, which are down about 22 percent over the past year, were down more than 1 percent in trading Monday morning.
A spokesman for U.S. Steel on Monday reiterated the company’s intention to complete the Nippon Steel deal. “We remain confident that our partnership with Nippon Steel is the best deal for American steel, American jobs, American communities and American supply chains,” he said.
U.S. Steel agreed to Nippon’s $14 billion proposed bid in late 2023, which shareholders later approved. But the deal faced significant pushback from the steelworkers’ union, and former President Joseph Biden blocked it, citing national security concerns, shortly before leaving office.
Both U.S. Steel and Nippon sued the Biden administration and the Cleveland-Cliffs, arguing that the national security review process for the deal had been corrupted. The Cleveland-Cliffs’s chief executive, Lourenco Goncalves, has signaled that he is preparing a fortified bid for U.S. Steel, though bitter relations between him and Mr. Burritt may complicate any deal talks.
Ancora said on Monday that it expected legal efforts to revive the Nippon deal would be futile.
“There appears to be no legal basis and no precedent for U.S. Steel’s costly litigation,” the firm wrote, adding that President Trump is a vocal opponent of the deal.
If elected to the board, Mr. Kestenbaum would pursue a number of initiatives, Ancora said, including cutting spending on Wall Street advisers for deal talks, which the firm estimated to be in the nine figures. Ancora also said Mr. Kestenbaum would present a “clear stand-alone strategy” and repair relations with the steelworkers’ union.
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