Proxy Battle for The Timken Company In Full Effect. Timken Sends Letter to Shareholders Criticizing Proposal from Relational Investors and CalSTRS


Timken warns shareholders not to be fooled by misleading dissident campaign.

We have been following the Timken/Relational-CalSTRS saga for a while now.

It is now in full proxy fight mode.  The latest is Timken’s launch against the dissidents with a letter that claims that Wall Street analysts disagree with the dissidents about the wisdom of splitting up the company.  They also claim that Relational-CalSTRS have been misleading in their pitch to shareholders.  Timken believes their proposal is bad news for the following reasons:

  1. CalSTRS and Relational Investors have indicated there is no downside to supporting their proposal, and that they actually want a spin-off, not to just evaluation a spin-off.  However, we believe that Relational-CalSTRS have been pretty clear about that since the beginning.
  2. CalSTRS and Relational Investors fundamentally misunderstand and mischaracterize the synergies between our businesses, stating that there are synergies in the steel and bearing business lines, but you have to look closely to see them.  Timken says they’ve been looking closely for many years.
  3. CalSTRS and Relational Investors claim undue credit for the Company’s share price performance, which they claim was impressive even before Relational-CalSTRS came along and they rode a [Ed.:  seemingly unrelated?] market rise thereafter.  We will note that TKR has shown an increase of 16.8% since we added it to our Opps Tracker in December 2012, and was at an increase of 21.4% when we locked it down in late January.  It is down about 3.6% since then.  Anyone taking credit for that?
  4. CalSTRS and Relational Investors are simply wrong in their assessment of the board structure and governance.  It is 75% independent and makes tough decisions for ALL [Ed.:  Emphasis in original.] shareholders.
Fletch on corporate governance: “Its all ball bearings nowadays.”

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