On Monday, The Timken Company announced that it sent another letter to its shareholders, urging them to support the company's proven strategy to create shareholder value and vote against Proxy Statement Item No. 6, the shareholder proposal to spin-off the Steel business.
In the letter, the company said: "The Timken Company Board and management team are committed to act in the best interests of all shareholders and to continue executing the company's proven strategy. We urge you to protect the long-term value of your investment in The Timken Company by voting against the misguided proposal by The California State Teachers' Retirement System (CalSTRS) and Relational Investors to force separation of the Timken Steel business from its Bearings & Power Transmission (B&PT) business. The CalSTRS and Relational Investors ill-advised proposal asks you to sacrifice long-term value creation and jeopardize the strength of the Company in exchange for illusory short-term gains."
"By highlighting our success but demanding we take action to separate the businesses, CalSTRS and Relational Investors demonstrate their fundamental lack of understanding of the integrated strategy driving that success. If they knew us, they would understand how we leverage strengths across our Steel and B&PT businesses, share research and technical expertise, and benefit from supply chain and operating efficiencies. All of this differentiates Timken from our competitors and allows us to deliver value-added solutions across common end markets and customers. By demanding that we move forward to separate Timken Steel from the rest of the Company, they are compromising our future success and competitive advantage. Under current circumstances, it just doesn't make sense," the letter continued.