Activist investor Ancora Holdings is escalating its campaign against U.S. Steel (X.N), demanding access to board minutes and financial records. The firm seeks to investigate alleged fiduciary breaches related to the company’s lawsuit over its blocked merger with Japan’s Nippon Steel (5401.T) and CEO David Burritt’s stock trading.
Ancora, which owns roughly 500,000 shares (less than 1%), argues the lawsuit wastes shareholder money and distracts from fixing the business. The investor is pressuring U.S. Steel to drop the appeal against former President Joe Biden’s decision to halt the $14.9 billion deal on national security grounds.
In a letter to U.S. Steel’s legal team, Ancora questions whether the board violated its duties by pursuing the lawsuit and whether Burritt traded on nonpublic merger information. It is specifically scrutinizing his use of a 10b5-1 trading plan. The company has until February 24 to provide confidential records on the merger and Burritt’s trades.
Last month, Ancora nominated nine directors to U.S. Steel’s 12-member board and proposed Alan Kestenbaum, former CEO of Stelco, as a replacement for Burritt. The annual shareholder meeting date is yet to be set.
The Biden administration’s intervention has complicated Nippon’s bid, prompting discussions of an alternative investment approach. Japanese Prime Minister Shigeru Ishiba criticized the U.S. decision as unjust political interference.
Ancora has a track record of securing board seats at major firms, including Norfolk Southern and LKQ (LKQ.O). The battle for control at U.S. Steel could intensify if the company resists the activist’s demands.
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