There was no coming together Tuesday when Timken management met with activist shareholders seeking to split the company.
Timken said it continues to oppose breaking up the longtime Canton-based steel and bearings maker.
And the major shareholders, California-based Relational Investors LLC and the California State Teachers Retirement System, said they still will push to spin off Timken’s steel operations and create two publicly traded companies that they think would result in higher share prices.
Few specific details about the meeting were released.
Timken said it is sending a letter to shareholders urging them to vote against the nonbinding proposal that will be presented at the May 7 shareholders meeting.
CalSTRS and Relational Investors, meanwhile, sent out a letter questioning the motivation of Timken’s board. Relational Investors is Timken’s largest shareholder with about 6.9 percent of outstanding shares; CalSTRS, a $161.5 billion pension fund, owns about 0.4 percent of Timken shares. The two have a longtime working relationship.
Timken said in a statement that board members and executives met with representatives from CalSTRS and Relational Investors “to discuss the flaws in the analysis behind the proposal and articulate the reasons why Timken believes its comprehensive strategic plan is the best path to create long-term value for shareholders.”
“As we have in the past, we outlined for CalSTRS and Relational Investors the benefits of our integrated platform and comprehensive strategic plan to drive value for shareholders as well as the flaws in the analysis of a spin-off of our steel business,” James W. Griffith, Timken president and chief executive officer, said in the statement. “It is clear to us that our proven business model and strategy to create shareholder value represent the best path forward for all Timken shareholders.”
Ralph Whitworth, founder and principal of Relational Investors, said in a statement, “[We] hoped that at today’s meeting Timken’s management and board would finally understand the powerful value proposition that flows from the overwhelmingly compelling and detailed case we have presented to create value through two separately traded companies.
“Instead, while the meeting was cordial, we met with the same amorphous arguments and faulty math that has characterized the company’s response all along.”
The full text of Timken’s statement and shareholders letter can be found at www.TimkenDrivesValue.com. The response from Relational Investors and CalSTRS can be found at www.unlocktimken.com.
Shares of Timken fell 92 cents Tuesday to $54.77.
