California-based Relational Investors LLC, which is pushing Timken Co. to split its bearings and steel businesses, has increased its stake in the Canton manufacturer to 7.9 percent, according to documents filed Monday.
Relational said it owned 7,506,535 shares in Timken, or 7.9 percent of outstanding shares, according to a filing with the Securities and Exchange Commission. Relational remains Timken’s single largest shareholder. In addition, the California State Teachers Retirement System (CalSTRS) said it owned 237,905 shares, or 0.25 percent of outstanding Timken shares.
The investment firm and CalSTRS said they spent a combined $359 million on their shares. Shares of Timken rose $1.31 to close at $61.41 on Monday, making Relational and CalSTRS holdings worth a combined $475.6 million and showing a paper profit of approximately $116.6 million.
Timken’s board and top executives earlier this year opposed CalSTRS and Relational’s proposal, placed on the company proxy statement, that the company split into two publicly traded businesses. But the CalSTRS proposal was approved in a nonbinding vote at Timken’s annual shareholders meeting in May. At the time of the vote, Relational owned about 6.9 percent of all Timken shares.
Timken followed up in June by creating a special committee to explore spinning off its steel business. It has not yet announced its findings and recommendations.
Relational said in Monday’s filing that it met with the special committee and also met with representatives of Goldman Sachs.
Relational’s principals said in the filing they believe Timken “has chosen an appropriate process and are confident if the board of directors are apprised of the proper analysis that the board will conclude that splitting the steel and bearings businesses is in the long-term best interest of shareholders.”
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com