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By Michael Flaherty
April 24 The shareholder battle between
specialty metals maker Arconic Inc and Elliott
Management took another turn on Monday after the company said
the hedge fund has twice turned down an offer to add two of
Elliott's nominees to its board.
Since early this year, the two sides have been locked in a
brutal battle for control of the company's board, with Elliott
nominating five directors.
Arconic announced on Monday that after last week's
resignation of its chief executive and chairman, Klaus
Kleinfeld, it was postponing its annual meeting from May 16 to
an unspecified day at the end of the month.
Kleinfeld resigned after sending a letter to Elliott founder
Paul Singer this month that Arconic's board did not approve and
that the hedge fund deemed threatening.
The $10 billion company, which separated from aluminum maker
Alcoa Corp last year, also said on Monday that it was
willing to nominate two of Elliott's director candidates to its
board, but that the hedge fund had twice turned down the offer.
The latest rebuff came after Kleinfeld's resignation
prompted Elliott, Arconic's largest shareholder, to add a term
to an attempted settlement agreement that would give Elliott
nominees majority representation on a new operations committee
within the board of directors.
Elliott has previously demanded, as part of the settlement
talks, that Arconic's board designate three of the hedge fund's
nominees to the CEO search committee, the company said on
Arconic said that as long as Elliott's nominees are willing
to be interviewed by the company, the board will appoint the
best two for the job, offering a deadline of April 26.
"We would prefer to settle the proxy contest on reasonable
terms consistent with good governance, but we are not willing to
agree to inappropriate conditions that give you undue influence"
and are not in shareholders' best interests Arconic said in an
email to Elliott, which it released as part of its announcement
Elliott's battle with Arconic is the most contentious U.S.
proxy battle so far during the spring annual meeting season for
publicly traded companies. The hedge fund's campaign directly
targeted Kleinfeld, called for his removal as CEO, and
criticized his track record.
Arconic has fought back, though the battle took a bizarre
turn when Kleinfeld's letter to Singer surfaced last week. The
two sides did not disclose the letter at first, but a few days
later, Elliott made it public after a media report on its
In vague hints throughout his April 11 letter, Kleinfeld
accused Singer of misbehaving at the 2006 World Cup in Germany.
Elliott, which holds 13.2 percent of Arconic stock, was not
immediately available for comment on Monday.
Kleinfeld has since stepped down from the boards of Morgan
Stanley and Hewlett Packard Enterprise Co.
(Additional reporting by Ankit Ajmera in Bengaluru; Editing by
Sai Sachin Ravikumar and Andrew Hay)