Sometime late this morning, the public will find out if a majority of Timken Co. stock owners want to spin off the Canton company’s steel operations.
This history-in-the-making vote takes place starting at 10 a.m. at Timken’s annual shareholders meeting inside the manufacturer’s headquarters.
It’s a sure bet that 7.3 percent of Timken shares will be voted in favor of splitting $5 billion Timken into one company that focuses on making bearings and another that makes steel. Those shares are owned by Relational Investors LLC and the California State Teachers Retirement System, the entities that placed the shareholder proposal on Timken’s proxy statement. They argue that having two publicly traded Timken companies will create greater value for all shareholders.
And it’s a sure bet that an estimated 15 percent or so of shares owned or controlled by the Timken family and related entities/insiders will vote no. The company’s board of directors is formally asking shareholders to turn down the ballot proposal, saying that the current integrated business model creates the best stock value.
The question yet to be answered is, are there enough other shareholder votes out there to get to 50 percent-plus-one, the minimum threshold to pass the nonbinding resolution?
If the measure fails, Relational and CalSTRS said they could renew their fight in 2014 plus wage a proxy contest to replace some or all of Timken’s directors.
Shares of Timken on Monday rose $1.07 to $54.61. Shares are up 14.6 percent, including dividends, since Jan. 1, and are up 4.2 percent from a year ago.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.