CHICAGO Timken Co., whose shareholders voted last month in favor of a nonbinding proposal to spin off its steel business from its other business units, has formed a strategy committee to evaluate the possibility and to review the companys corporate governance and capital-allocation strategy.
About 53 percent of the votes cast at the annual meeting May 17representing about 47 percent of the companys outstanding shareswere in favor of a split, the Canton, Ohio-based company had reported (amm.com, May 7).
Two investor groups, West Sacramento, Calif.-based California State Teachers Retirement System and San Diego-based Relational Investors LLC, began their campaign to "unlock value" at Timken by separating its steel and bearings businesses last year.
Although the board of directors was not bound by the results of the vote, it formed an evaluation committee consisting of all independent and non-Timken family board members, with lead director Joseph W. Ralston serving as chairman. The committee has retained New York-based Goldman Sachs Group Inc. to assist in its evaluation.
"The board values the feedback we received from our shareholders through the course of the proxy process as well as at our recent annual meeting," Ralston said in a June 10 statement. "The committee, with the aid of outside advisors, is carefully evaluating options related to corporate structure as well as shareholder input on corporate governance and capital allocation."
Timken said it will report on the results of the committees evaluation by the end of the third quarter.
After the proposal received support from a majority of shareholders, Relational Investors principal Ralph Whitworth said Timkens "conglomerate structure ... has proven to be an ongoing impediment (and) must be eliminated."