Ancora Sends Letter to U.S. Steel Stockholders Regarding Its Comprehensive Plan to Maximize Value
Ancora Holdings Group, a notable stockholder in United States Steel Corporation, has filed a definitive proxy statement with the U.S. Securities and Exchange Commission, nominating a slate of nine highly qualified director candidates for election to the company’s Board of Directors at the 2025 Annual Meeting of Stockholders scheduled for May 6, 2025. In conjunction with this filing, Ancora has sent a letter to U.S. Steel’s stockholders detailing its strategic five-point plan for maximizing stockholder value.
Ancora’s vision focuses on maximizing short-term value through the pursuit of a sale to Nippon Steel at $55 per share, while also positioning U.S. Steel for long-term success under a standalone strategy if the sale fails. The letter emphasizes that Ancora’s nominees are committed to ceasing destructive litigation and refocusing on building sustainable relationships with key stakeholders, especially the labor union. Ancora believes this balanced approach will result in greater value creation for stockholders.
The Five-Point Plan to Maximize Stockholder Value:
1. Pursue the $55 Per Share Sale to Nippon Steel: Ancora advocates for continuing negotiations for the sale of U.S. Steel to Nippon Steel at $55 per share, a price that the company believes accurately reflects U.S. Steel’s market value and strategic worth. Ancora’s leadership, however, also commits to halting any unnecessary and frivolous litigation, such as the ongoing legal action against United Steelworkers President David McCall. This litigation is seen as damaging to U.S. Steel’s reputation and its relationships with essential stakeholders. By ceasing such actions, Ancora aims to protect the company’s standing with labor unions and other key partners, making the sale process smoother and more aligned with long-term shareholder interests.
2. Alternative Standalone Strategy If the Sale Is Blocked: Ancora acknowledges that the sale to Nippon Steel may face regulatory challenges or other obstacles. In the event that the sale is blocked or formally terminated, Ancora has proposed a detailed alternative strategy to ensure significant value creation for U.S. Steel stockholders. The proposed standalone strategy is designed to deliver a pro forma total stockholder return of $75.67 per share, based on the following actions:
o Sale of Big River Steel: Ancora plans to sell U.S. Steel's Big River Steel division, which is expected to generate $8 billion in gross proceeds, resulting in an estimated $7.6 billion in net proceeds after taxes. This sale would unlock significant value for stockholders and create a foundation for reinvestment in the company's core operations.
o One-Time Special Dividend: Ancora’s strategy includes returning a substantial portion of the sale proceeds to stockholders in the form of a $5 billion special dividend, or approximately $19.25 per share. This payout would provide immediate, tangible value to stockholders, rewarding them for their investment in the company.
o Reinvestment in North American Flat-Rolled Assets: The remaining proceeds from the Big River Steel sale will be reinvested into U.S. Steel’s North American Flat-Rolled business. These assets have high growth potential, and Ancora’s plan aims to increase the division’s EBITDA by 120% by the end of 2027, providing strong, sustainable returns in the years ahead.
3. Strengthen Union Relations and Labor Agreements: Ancora recognizes the critical role that labor unions play in U.S. Steel’s long-term success. Ancora’s leadership team is committed to strengthening relationships with labor unions, with a particular focus on negotiating a new labor agreement ahead of the expiration of the current contract in 2026. By improving union relations, Ancora aims to ensure that the company maintains a stable, motivated workforce, which is essential for achieving its operational and financial goals.
4. Enhance U.S. Steel’s Balance Sheet: A key pillar of Ancora’s strategy is to fortify U.S. Steel’s balance sheet to ensure that the company has the capital flexibility needed to pursue future opportunities. This includes reducing debt and increasing financial stability, which will allow U.S. Steel to better weather market volatility and capitalize on growth prospects. Ancora believes that a strong balance sheet is essential for the company’s ability to invest in new projects, enhance shareholder returns, and support long-term profitability.
5. Capital Allocation and Return of Capital to Stockholders: With a deleveraged balance sheet, Ancora plans to implement a capital allocation strategy that prioritizes returning value to stockholders. This includes regular dividend payments and share buybacks, which will create additional upside for investors. By focusing on disciplined capital allocation, Ancora aims to ensure that U.S. Steel remains a strong, competitive company while simultaneously rewarding its stockholders for their support.
Ancora's proposal underscores the company’s desire to rejuvenate U.S. Steel, whether through the sale to Nippon Steel or through a revitalized, independent strategy. The leadership team at Ancora believes that stockholders will be best served by electing their slate of director candidates, who will bring the vision, expertise, and determination necessary to revitalize the company and enhance stockholder value.
Key Takeaways:
• Ancora Holdings is filing a proxy statement to nominate nine director candidates to U.S. Steel’s Board.
• Five-Point Plan: Ancora advocates for the $55 per share sale to Nippon Steel, with an alternative strategy if the sale is blocked.
o Big River Steel Sale: Expected to generate $8 billion in gross proceeds, or $7.6 billion after taxes.
o Special Dividend: Ancora plans to return $5 billion to stockholders (around $19.25 per share).
o EBITDA Growth: The plan aims for a 120% increase in EBITDA from North American Flat-Rolled assets by 2027.
• Labor Relations: Ancora intends to improve union relations and negotiate a new labor agreement ahead of 2026.
• Strengthen the Balance Sheet: A focus on reducing debt and enhancing financial flexibility for future growth.
• Capital Allocation Strategy: Includes regular dividends and share buybacks to increase stockholder value.
• Ancora urges stockholders to vote for its slate of directors using the GOLD Universal Proxy Card to implement these transformative plans.
