Ancora Urges U.S. Steel’s Board to Postpone Annual Meeting
Ancora Holdings Group, LLC, a significant shareholder in United States Steel Corporation (U.S. Steel), is calling for the delay of the company’s 2025 Annual Meeting of Stockholders. In a letter issued on February 27, 2025, Ancora expressed its concerns about the growing uncertainty surrounding the blocked sale to Nippon Steel Corporation and its impact on the future leadership of U.S. Steel. Ancora argues that shareholders must have full clarity regarding this critical issue before voting on the board and leadership positions, as the current state of affairs leaves them unable to make a fully informed decision.
Ancora’s position is that holding the election while the company pursues litigation to revive the blocked deal would be unfair and could constitute a breach of the board’s fiduciary duties. The company’s board is currently engaged in a legal battle in an attempt to overturn the blockage of the sale to Nippon Steel, which many stakeholders view as a key event for the future of U.S. Steel. Given the unresolved nature of this litigation, Ancora believes the annual meeting should be delayed until shareholders have a clearer understanding of the outcome.
Shareholder Concerns Over Uncertainty
Ancora’s letter underscores the growing concerns from a rising chorus of shareholders who support the idea of postponing the annual meeting. The uncertainty surrounding the Nippon Steel sale has left many shareholders uncertain about the company’s direction. Ancora specifically points to the importance of knowing the outcome of the "Hail Mary" litigation before making any significant decisions about the company's leadership.
According to Ancora, U.S. Steel is facing a critical moment in its history. Shareholders are being asked to vote on a new slate of directors, including the nomination of Alan Kestenbaum, a well-respected industry figure, to potentially take over as CEO. Kestenbaum, according to Ancora, is prepared to make the necessary changes to turn U.S. Steel’s operations around and generate long-term value for shareholders. However, Ancora asserts that shareholders will not be able to make an informed decision about this new leadership if the legal issues surrounding the Nippon deal are still in limbo.
Fiduciary Responsibility and Delaying the Vote
Ancora strongly argues that holding the annual meeting during this period of uncertainty would not only be unfair to shareholders, but it would also be a violation of the board’s fiduciary duties. The letter notes that the current situation is fraught with complications, including defiance of a former president’s executive order and opposition from the current president regarding the sale to Nippon. The growing controversy surrounding the deal has only deepened the uncertainty, and holding the director election without resolving these issues could result in a decision made under conditions that do not reflect the true state of the company.
Ancora has proposed that the annual meeting be scheduled at least 45 days after June 18th, the outside date for unwinding the merger agreement. By this time, shareholders would have a much clearer picture of the litigation’s outcome and could make more informed decisions about the company’s future. The firm emphasizes that this delay is permissible under Delaware law and is the appropriate course of action given the critical circumstances.
Ancora’s Appeal to Shareholders
In its letter, Ancora encourages other shareholders to voice their support for delaying the meeting. The company believes that postponing the vote would be in the best interest of all stakeholders involved. Ancora’s call for a delay is backed by the growing sentiment among shareholders who believe that proceeding with the vote while significant uncertainties remain would be reckless and damaging to the company’s long-term prospects.
Ancora has made it clear that it remains committed to engaging with U.S. Steel’s board and shareholders to ensure that the company is on the right path for sustainable growth and value creation. However, Ancora is adamant that this must only happen when all the relevant facts are on the table, particularly regarding the outcome of the Nippon litigation.
KEY TAKEAWAYS:
• Ancora Holdings, a significant shareholder in U.S. Steel, has called for a delay in the 2025 Annual Meeting of Stockholders due to uncertainty surrounding the blocked sale to Nippon Steel.
• Ancora argues that shareholders need clarity on the litigation regarding the Nippon deal before voting on leadership decisions.
• The company has nominated a slate of nine independent candidates for election to the board, including industry veteran Alan Kestenbaum as CEO.
• Ancora believes holding the vote during the current period of uncertainty would be unfair and could breach the board's fiduciary duties.
• Ancora has urged U.S. Steel’s board to delay the annual meeting by at least 45 days beyond June 18th to allow shareholders to make a fully informed decision.
• The call for a delay is supported by a growing number of shareholders, and Ancora has encouraged fellow investors to voice their opinion on the matter.
• Ancora views the delay as permissible under Delaware law and in the best interests of U.S. Steel’s stakeholders.
