Arconic opens door to Elliott deal with offer of two board seats
HOUSTON – Arconic broached a potential compromise in a bruising proxy battle with Elliott Management, saying it would be willing to hand over two of the four board seats sought by billionaire Paul Singer’s New York hedge fund.
The Arconic board will “promptly appoint” two of Elliott’s candidates if they confirm they’re willing to be nominated by April 26, according to a statement Monday. The May 16 annual meeting will be delayed to later in the month to allow for ballot changes at the maker of aluminium parts for autos and aircraft.
The offer of two board seats “signalled a dramatically more conciliatory attitude” toward Elliott, Carol Levenson, an analyst at Gimme Credit, said in a note to clients.
Arconic is stepping up efforts to resolve a proxy fight that led to the departure last week of CEO Klaus Kleinfeld, who resigned after firing off a letter to Singer that was described by Elliott as threatening and by the board as showing “poor judgment.” In a sign that the battle may not be over, the company accused Elliott of reneging on two tentative settlement agreements in the past two weeks by adding additional terms.
Most recently, Arconic said, Elliott pushed for an operations committee that would be dominated by the fund’s candidates. The company said that would hurt its ability to hire the best CEO. Elliott, which has a 13.2% stake in Arconic, also sought three of the five members on a board committee to search for a new leader, the manufacturer said.
'UNDUE INFLUENCE'
“We would prefer to settle the proxy contest on reasonable terms consistent with good governance,” the board wrote to Elliott, according to the statement. “We are not willing to agree to inappropriate conditions that give you undue influence and that are not in the best interests of all Arconic shareholders.”
Elliott declined to comment. The activist investor has backed Larry Lawson, the former CEO of Spirit AeroSystems Holdings Inc., for the top job. Arconic named board member David Hess as interim CEO after Kleinfeld’s exit.
Elliott since last year has had three of its hand-picked candidates on the 13-member Arconic board. Winning the proxy fight would give it a majority.
For Singer, Arconic’s acceptance marked his second potential victory of the day in Elliott’s activist efforts. Dutch paintmaker Akzo Nobel NV said earlier Monday it would review a sweetened $29-billion takeover offer from US-based PPG Industries, which has Elliott’s backing.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation