U. S. Steel Comments on Ancora’s Blundering, Value-Destructive “Plan”
U.S. Steel (NYSE: X) has responded to Ancora Catalyst Institutional's strategic plan, highlighting several critical flaws. The company criticizes Ancora's contradictory position of supporting both their own $75+ per share plan while simultaneously backing Nippon Steel's $55 per share cash deal.
The company points out that Ancora initially opposed the Nippon Steel transaction but has suddenly reversed its position. This follows President Trump's order for a fresh CFIUS review, which validates the Board's litigation strategy that Ancora previously criticized.
U.S. Steel argues that Ancora's plan to reverse mini mill investments is outdated and value-destructive, potentially leading to increased earnings volatility and lower valuation multiples. The company emphasizes that their mini mill investments have reduced financial volatility and expanded valuation multiples by approximately 2x.
U.S. Steel (NYSE: X) ha risposto al piano strategico di Ancora Catalyst Institutional, evidenziando diversi difetti critici. L'azienda critica la posizione contraddittoria di Ancora di sostenere sia il proprio piano da oltre $75 per azione, sia l'accordo in contante da $55 per azione con Nippon Steel.
L'azienda sottolinea che Ancora inizialmente si era opposta alla transazione con Nippon Steel, ma ha improvvisamente cambiato idea. Questo seguito all'ordine del Presidente Trump per una nuova revisione da parte del CFIUS, che convalida la strategia legale del Consiglio che Ancora aveva criticato in precedenza.
U.S. Steel sostiene che il piano di Ancora di invertire gli investimenti nei mini mill è obsoleto e distruttivo per il valore, potenzialmente portando a una maggiore volatilità degli utili e a multipli di valutazione più bassi. L'azienda enfatizza che i loro investimenti nei mini mill hanno ridotto la volatilità finanziaria e ampliato i multipli di valutazione di circa 2 volte.
U.S. Steel (NYSE: X) ha respondido al plan estratégico de Ancora Catalyst Institutional, destacando varios defectos críticos. La empresa critica la posición contradictoria de Ancora de apoyar tanto su propio plan de más de $75 por acción como al mismo tiempo respaldar el acuerdo en efectivo de Nippon Steel de $55 por acción.
La empresa señala que Ancora inicialmente se opuso a la transacción con Nippon Steel, pero de repente ha revertido su posición. Esto sigue a la orden del presidente Trump para una nueva revisión del CFIUS, que valida la estrategia de litigio de la Junta que Ancora había criticado anteriormente.
U.S. Steel argumenta que el plan de Ancora de revertir inversiones en mini molinos está desactualizado y destruye valor, lo que podría llevar a una mayor volatilidad en las ganancias y a múltiplos de valoración más bajos. La empresa enfatiza que sus inversiones en mini molinos han reducido la volatilidad financiera y ampliado los múltiplos de valoración en aproximadamente 2 veces.
U.S. Steel (NYSE: X)는 Ancora Catalyst Institutional의 전략적 계획에 대응하여 여러 가지 중요한 결함을 강조했습니다. 이 회사는 Ancora가 자신들의 주당 $75 이상의 계획을 지지하는 동시에 Nippon Steel의 주당 $55 현금 거래를 지지하는 모순된 입장을 비판합니다.
회사는 Ancora가 처음에는 Nippon Steel 거래에 반대했지만 갑자기 입장을 바꿨다고 지적합니다. 이는 트럼프 대통령의 새로운 CFIUS 검토 명령에 따른 것으로, Ancora가 이전에 비판했던 이사회 소송 전략을 정당화합니다.
U.S. Steel은 Ancora의 미니 밀 투자 철회 계획이 구식이며 가치 파괴적이라고 주장하며, 이는 수익 변동성을 증가시키고 낮은 평가 배수를 초래할 수 있다고 경고합니다. 이 회사는 자사의 미니 밀 투자가 재무 변동성을 줄이고 평가 배수를 약 2배 확대했다고 강조합니다.
U.S. Steel (NYSE: X) a répondu au plan stratégique d'Ancora Catalyst Institutional en soulignant plusieurs défauts critiques. L'entreprise critique la position contradictoire d'Ancora qui soutient à la fois son propre plan de plus de 75 $ par action tout en soutenant simultanément l'accord en espèces de Nippon Steel de 55 $ par action.
L'entreprise souligne qu'Ancora s'était initialement opposé à la transaction avec Nippon Steel, mais a soudainement changé de position. Cela fait suite à l'ordre du président Trump pour un nouvel examen par le CFIUS, qui valide la stratégie de litige du Conseil que d'Ancora avait précédemment critiquée.
U.S. Steel soutient que le plan d'Ancora de renverser les investissements dans les mini-moulins est obsolète et destructeur de valeur, ce qui pourrait entraîner une volatilité accrue des bénéfices et des multiples de valorisation plus bas. L'entreprise souligne que ses investissements dans les mini-moulins ont réduit la volatilité financière et élargi les multiples de valorisation d'environ 2 fois.
U.S. Steel (NYSE: X) hat auf den strategischen Plan von Ancora Catalyst Institutional reagiert und mehrere kritische Mängel hervorgehoben. Das Unternehmen kritisiert Ancora für ihre widersprüchliche Position, sowohl ihren eigenen Plan von über 75 $ pro Aktie zu unterstützen, als auch gleichzeitig das Barangebot von Nippon Steel über 55 $ pro Aktie zu befürworten.
Das Unternehmen weist darauf hin, dass Ancora zunächst gegen die Transaktion mit Nippon Steel war, aber plötzlich seine Position geändert hat. Dies folgt auf den Auftrag von Präsident Trump für eine neue CFIUS-Prüfung, die die Rechtsstrategie des Vorstands validiert, die Ancora zuvor kritisiert hatte.
U.S. Steel argumentiert, dass Ancora's Plan, die Investitionen in Mini-Mühlen zurückzuziehen, veraltet und wertzerstörend ist, was potenziell zu einer erhöhten Ertragsvolatilität und niedrigeren Bewertungsmultiplikatoren führen könnte. Das Unternehmen betont, dass ihre Investitionen in Mini-Mühlen die finanzielle Volatilität reduziert und die Bewertungsmultiplikatoren um etwa das 2-fache erhöht haben.
- 98% shareholder approval for Nippon Steel deal
- Mini mill investments have expanded valuation multiple by ~2x
- Sell-side analysts have increased price targets from $11/share (2019) to $43/share (2025)
- Ongoing regulatory uncertainty with new CFIUS review
- Complex transaction process with potential for delays
- Significant gap between current $55/share offer and Ancora's claimed $75/share value
Insights
This proxy battle between U.S. Steel and activist investor Ancora represents a significant high-stakes corporate governance conflict with major implications for shareholder value. At the center is Nippon Steel's all-cash acquisition offer of $55 per share (representing a
The critical development is President Trump's order for a fresh CFIUS review of the Nippon Steel transaction, introducing substantial regulatory uncertainty when the deal appeared to be progressing. This regulatory hurdle could significantly impact deal completion probability, explaining why shares trade below the offer price despite
The strategic disagreement centers on production technology - U.S. Steel defends its mini-mill investments (particularly Big River Steel) as providing higher valuation multiples and reduced earnings volatility compared to traditional blast furnaces. The company argues that Ancora's strategy to potentially divest mini-mill assets would damage shareholder value by reverting to a business model with historically lower trading multiples (~4x versus 6x).
Ancora's proposal suggesting a potential
After Aggressively Attempting to Undermine the Nippon Steel Transaction, Ancora Has Flip-Flopped and Claims to Now Support the Deal
New Presidential Memorandum Validates the Unwavering Commitment of U. S. Steel’s Board to Finish the Job and Deliver Significant Investment from Nippon Steel – in the Face of Ancora’s Wrongheaded Attempt to Undermine U. S. Steel’s Pursuit of Revisiting the CFIUS Process
Ancora’s “Plan” is Contradictory, Full of Unfounded Assumptions and Mimics Cleveland-Cliffs’ Failed Strategy
Urges Stockholders to Vote on the WHITE Proxy Card “FOR” U. S. Steel’s 10 Director Nominees TODAY
Ancora’s newly unveiled, last-minute “plan” is inconsistent at best and begets the critical question: If Ancora now believes their plan would deliver
The
1. After consistently opposing the deal with Nippon Steel, Ancora and its nominees in desperation have suddenly changed their tune and now claim to hope the transaction worth
- Ancora initially launched its proxy contest with the stated aim of disrupting the transaction process and has since worked to undermine U. S. Steel’s ability to complete the Nippon Steel deal.
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This deal was supported by more than
98% of U. S. Steel shares voting on the transaction1, and Ancora has likely received significant backlash from U. S. Steel stockholders and other stakeholders who are opposed to Ancora’s efforts to undermine the deal, which will deliver$55 - Having previously characterized the deal as a “bad decision” that they were committed to abandoning, Ancora now agrees that it is in the best interests of U. S. Steel stockholders.
- If Ancora’s nominees are truly independent and open to pursuing all paths to value creation, how could all of their nominees change course so quickly? In our view, if all of Ancora’s nominees in fact uniformly opposed the deal last week and uniformly support it now, their independence is questionable.
2. President Trump has now ordered a fresh review by the Committee on Foreign Investment in
- Even if all of Ancora’s supposedly independent directors have done a collective about-face and now support the Nippon Steel transaction, why disrupt the process at this critical moment – right in the middle of the newly reopened CFIUS review? It would seem foolhardy to install new and untested directors who have no institutional knowledge or understanding of the complex oversight that was required to get the Company to this point.
3. Ancora’s latest “plan” is an outdated strategy to reverse U. S. Steel’s mini mill investments, which would be value-destructive to stockholders.
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Ancora’s strategy is expensive, would take years to execute and would come with significant market and execution risk – all to achieve a more volatile earnings profile and would lower the Company’s valuation multiple.
- Data clearly shows that Electric Arc Furnace (“EAF”) operations have captured a larger share of the market2 and garner premium valuations compared to Blast Furnace operations over the last several decades.3
- Ancora’s plan to sell Big River Steel would reduce U. S. Steel’s valuation multiple, increase earnings volatility and make the Company more like Cleveland Cliffs, which has lost more than two-thirds of its share value since its 52-week high in April 2024.4
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U. S. Steel’s mini mill investments have reduced volatility of financial results, expanded its valuation multiple by more than ~2x5 and narrowed the gap with EAF peers. Sell-side analysts clearly validate the strategy with increased standalone price targets from
$11 $43 - Mini mill manufactured steel is also what customers are increasingly demanding, and U. S. Steel has not heard from any other stockholder who supports turning back the clock to a blast furnace only strategy, like Ancora’s.
- Ancora also ignores that U. S. Steel’s North American Flat-Rolled segment – which includes the Company’s integrated blast furnace assets – has successfully executed a transformational commercial and operating strategy that has dramatically improved financial performance.
- The assertion that there has been underinvestment or that there is significant untapped potential ignores the facts, which include that the Company’s integrated assets have outperformed its peer and have received more capital investment per ton of production than its integrated peer.
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Ancora’s own materials demonstrate that Alan Kestenbaum only has experience overseeing small, non-strategic investments and could not point to a single project valued at
$200 million
4. Ancora’s new “plan” is based on false assumptions and financial engineering that appear to be designed to overinflate values.
- Ancora wants to cite the benefits of the mini mill segment – either in trading multiple or sale proceeds – but at the same time talks down this segment’s value when attempting to defend its own antiquated blast furnace only strategy.
- Ancora’s plan to sell Big River Steel is a complete reversal from Ancora’s February 2025 conference call comments, where they stated they were going to “bring Big River to industry standards.”8
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Ancora is asking stockholders to make decisions based on 2027E EBITDA that they themselves described as simply “hypothetical” and inclusive of EBITDA which, according to Ancora, would not occur until 2028 at the earliest9, assuming an unrealistically accelerated timeline for equipment procurement, permitting, construction, ramp up and qualification for nearly
$3 billion - The assumed pro forma trading multiple of 6x is unrealistic. Pure blast furnace companies – which U. S. Steel would become under Ancora’s plan – have historically traded at 4x.10
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Ancora’s pro forma net debt assumption to derive
$75 $2.75 billion - Ancora’s newfound optimism in the upside of U. S. Steel stock is counter to their previous attempts to jawbone down our stock.
5. Ancora’s “plan” appears to want to put the decision making of U. S. Steel in the hands of the United Steelworkers (“USW”) International leadership, to the detriment of a value-maximizing strategy that benefits stockholders.
- Ancora’s stated plan illogically includes selling a brand-new endless strip production asset in order to generate proceeds they purportedly would use to buy the same asset but locate it in a USW-represented facility.
- The fact is that U. S. Steel stockholders and the local members and local leaders of the USW have overwhelmingly supported the Nippon Steel transaction.11
- The U. S. Steel Board and management team are already delivering extraordinary value and opportunities to represented employees, and the transaction with Nippon Steel would protect jobs for generations to come.
- In contrast, the USW International leadership has long been aligned with Cleveland-Cliffs12 – a competing and unsuccessful bidder in the strategic alternatives review process – and would support a suboptimal outcome for U. S. Steel stockholders that is instead aligned with Cleveland-Cliffs’ interests.13
In sum, stockholders should be very skeptical of Ancora’s “plan” or that their nominees could or would vigorously fight for the Nippon Steel deal. Stockholders should reject their baseless, self-serving and value-destructive proxy contest.
The Company encourages U. S. Steel stockholders to protect the value of your investment and vote "FOR" all 10 highly qualified U. S. Steel director nominees standing for election at the Annual Meeting on the WHITE proxy card and to DISCARD any materials sent by Ancora, including any gold proxy card or gold voting instruction form, and NOT to vote using Ancora’s materials.
For more information regarding U. S. Steel’s strategy and Board nominees, please visit:
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About U. S. Steel
Founded in 1901, U. S. Steel delivers profitable and sustainable steel solutions. Propelled by its talented employees and an unwavering focus on safety, U. S. Steel serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products. Steel production begins with our competitively advantaged iron ore production capabilities which fuel our integrated steelmaking facilities and investments in electric arc furnaces. To help our customers create the best products with the fewest emissions, we are committed to reaching net-zero greenhouse gas emissions by 2050. U. S. Steel is at the forefront of creating steels that are stronger, lighter, and better for the environment. This includes our proprietary XG3® advanced high-strength steel, verdeX® steel produced with 70
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The Company directs readers to Item 1A of the Annual Report on Form 10-K for the year ending December 31, 2024, and the other documents it files with the SEC for other risks associated with the Company’s future performance. These documents contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements. All information in this report is as of the date above. The Company does not undertake any duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations whether as a result of new information, future events or otherwise, except as required by law. References to (i) “U. S. 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1 Source: U. S. Steel Press Release 4/12/24
2 Sources: First River LLC 1990-1993; AISI 1994-2009; CRU 2010-2029
3 Sources: Based on historical average EV / NTM EBITDA multiples per FactSet. EAF operations include Nucor and Steel Dynamics. Blast furnace operations include Cleveland-Cliffs, ArcelorMittal, and Stelco
4 Based on Cleveland-Cliffs’ closing price on 4/4/25 of
5 Time period from 9/30/19, one day before U. S. Steel announced the acquisition of
6 Mean research target price as of the end of 2019. Based on 11 sell-side research estimates
7 Mean research target price as of 4/7/25. Based on seven sell-side research estimates of the standalone valuation of U. S. Steel
8 Source: Ancora Schedule 14A 2/19/25
9 Source: Ancora Presentation, Slide 24, 4/8/25
10 Market data as of 4/4/25 per FactSet. Blast furnace operations include Cleveland-Cliffs, ArcelorMittal, and Stelco measured over the last three years
11 Sources: U. S. Steel Press Release 4/12/24 and “What People Are Saying – Immense Support from Employees”
12 Sources: Cleveland-Cliffs Press Release 8/17/23 and Cleveland-Cliffs Press Release 9/5/24
13 Source: U. S. Steel Definitive Proxy Statement 3/12/24
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Source: United States Steel Corporation
FAQ
What is the current offer price for U.S. Steel (X) from Nippon Steel?
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