Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Arconic, Elliott Management End Bitter Proxy Fight Stock Price Barely Affected by Agreement

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Arconic, Elliott Management End Bitter Proxy Fight Stock Price Barely Affected by Agreement

Article excerpt

For all the heated rhetoric spewed during the four-month proxy fight between Arconic and activist hedge fund Elliott Management, investors greeted Monday's announcement of a peace treaty with barely a whimper.

Arconic shares finished the day at $27.63, up 5 cents on news that the specialty metals parts maker had agreed to put three more representatives of the $32 billion hedge fund on its board of directors. Arconic also agreed to elect its entire board annually and do away with a requirement for a supermajority vote of shareholders on some matters, changes that the company had said earlier this year that it would make.

The agreement marks a significant achievement for Elliott, which controls about 13.2 percent of Arconic's shares. The activist hedge fund has a track record of convincing targets of the wisdom of its advice.

The settlement, which will be filed with the U.S. Securities and Exchange Commission, averts a showdown at Arconic's shareholder meeting Thursday in Purchase, N.Y., where investors were scheduled to vote on opposing slates of four directors offered by Arconic and Elliott.

It comes a week after Glass Lewis, which advises pension funds and other large investors on how to vote in proxy matters, backed Elliott's slate of directors. The endorsement was probably the last straw for Arconic, according to Carol Levenson, research director of Gimme Credit, a corporate bond research firm.

"This looks like mainly a governance coup ... with no promises regarding changes to the business or financial model," she wrote in a note to clients Monday.

Ms. Levenson wrote that Elliott's involvement at the company adds to her concerns about Arconic being able to reduce the debt load the company took on when it was spun out of Alcoa in November.

Instead of choosing from competing slates of directors, Arconic shareholders will vote Thursday on a unified slate of four directors, including three nominated by Elliott: - former Precision Castparts executive Christopher L. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.