Ancora-Backed CEO Candidate Proposes US Steel Overhaul
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Steel industry veteran Alan Kestenbaum said he’s willing to make a significant personal investment in United States Steel Corp. if it abandons a merger with Nippon Steel Corp. and he’s selected to become its chief executive.
“I want to have a stake in something that I’m going to be involved in,” the former Stelco Holdings Inc. CEO said Jan. 27 in an interview. “If I get the chance to run the show, I’ll invest in myself.”
His comments come after activist investor Ancora Holdings Group said it intends to force U.S. Steel to abandon its deal with Nippon Steel. Ancora nominated nine candidates for U.S. Steel’s board including Kestenbaum, who the firm wants to install as a replacement to current CEO David Burritt. Nippon Steel’s $14.1 billion takeover was blocked this month by former U.S. President Joe Biden, though the companies are pursuing legal measures to save the deal.
To be sure, there’s no guarantee Kestenbaum will ever see the inside of the U.S. Steel boardroom, let alone become its next CEO. Ancora’s position is just 0.18% of all outstanding shares, and they’ll need to convince existing shareholders that the plan is worth it.
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Kestenbaum said he favors Ancora’s plan, and if given the chance to become U.S. Steel’s next CEO he’d put in place an operational plan to “fix” the Pittsburgh-based company. While he wouldn’t reveal details of how he intends to change things, the 63-year-old industry veteran said his track record shows he knows how to install the right people, boost employee morale and make operations more efficient.
Kestenbaum, who’s CEO of private equity firm Bedrock Industries Group, is known as a turnaround artist. In 2017, he bought U.S. Steel’s Canadian steel assets out of bankruptcy, restored the name Stelco and pursued a seven-year reorganization that ended with the company’s $2.7 billion sale to Cliffs in November. Cliffs sought to buy the Hamilton, Ontario-based steelmaker months after losing a bidding war for U.S. Steel.
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Kestenbaum said he’s not willing to buy US Steel shares at the current price — which he considers too high — and he won’t back the current management. Assuming the stock price is right, he said he’s willing to invest enough to become U.S. Steel’s largest shareholder.
“I intend to take a major position in U.S. Steel,” he said.
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