Feb 19 Timken Co's largest shareholder
urged the diversified manufacturer to separate its steel and
bearings businesses, and criticized its corporate governance.
"The company trades at a steep discount due to the widely
divergent characteristics of its businesses and a separation of
the steel business would fundamentally change the way the
businesses are valued by the market," Relational Investors LLC
said in a statement on Tuesday.
Relational has the support of minority shareholder
California State Teachers Retirement System (CalSTRS) in its
push for a split.
The two firms together own 7.31 percent of Timken.
Relational said Timken has a history of poor corporate
governance, pointing to the executive chairman's $9 million
compensation, among others.
"The board has consistently demonstrated its unwillingness
to seriously consider strategies to increase shareholder value,"
Relational first reported its Timken stake in November,
calling for a spinoff of the steel business.
Timken had said that separating its business "at that time
would not be in the best interests of Timken shareholders".
The company's shares, which have gained nearly 40 percent
since Relational reported its stake, rose 2 percent to $57.44 on
Tuesday on the New York Stock Exchange.