April 1 U.S. industrial conglomerate Timken Co
reiterated that it will not split its steel and bearings
businesses despite pressure from its top shareholder, and said
the investor's analysis of benefits from a break-up had serious
Activist fund Relational Investors LLC and CalSTRS, a large
public pension fund, jointly reported a 6.15 percent stake in
Timken in November and said Timken should split into two
publicly traded companies.
As of March 21, the investors own a combined 7.28 percent of
Timken said it has reviewed a separation of the company
along with its external advisers, and concluded that
"maintaining (Timken) in its current integrated state is in the
best interests of shareholders at this time."
The investors had said Timken would be worth $68.36 per
share on a sum-of-the-parts basis upon separation, according to
a regulatory filing. Timken shares closed at $56.58 on Thursday.
Timken said in the regulatory filing the shareholders'
analysis does not include the over $200 million in one-time
transaction charges, and $60 to $80 million in lost annual
It also said its steel business, if spun off, would have
limited liquidity and not enough financial flexibility to
undertake big projects.
Timken called the shareholders' attempts as misguided in
their attempt to create "illusory short-term gains through the
spin off of the steel business."
It asked its shareholders to vote against their proposal in
the shareholder meeting on May 7.