(Adds details from Elliott's release)
By Michael Flaherty
April 25 Tensions between Elliott Management and
specialty metals maker Arconic Inc escalated on
Tuesday, as the hedge fund spurned a truce offered by the
company and urged shareholders to elect all four of its director
Elliott's latest letter to shareholders came a day after
Arconic said it was willing to interview Elliott's nominees and
elect the two best candidates for the seats. That offer was set
to expire on Wednesday.
But Elliott fired back, describing the offer as a "sign of
desperation" and calling the board "entrenched" amid the drama
around the bizarre circumstances behind last week's sudden
resignation of its Chief Executive and Chairman Klaus Kleinfeld.
"Given where things stand, we have determined that the only
realistic way to produce the kind of change Arconic needs is
through the election of all four" of Elliott's nominees, the
company said in its letter.
Arconic's board has five seats up for election at the annual
meeting. Elliott originally nominated directors for all five
spots but has reduced its slate to four because existing
director, Ulrich Schmidt, is running for re-election.
Since early this year, the two sides have been locked in a
brutal battle for leadership control inside the $10 billion
company, which separated from aluminum maker Alcoa Corp
Arconic said on Monday it was postponing its annual meeting
from May 16 to the end of the month, in light of Kleinfeld's
The New York-based company said Elliott had turned down
offers to reach a truce, with the latest sticking point focused
on the hedge fund's insistence that it receive majority
representation on a proposed board-level operating committee.
The two sides had been working toward a settlement agreement
to avoid a shareholder vote on the board seats, Arconic said in
its statement on Monday, which included letters sent between the
But a letter from Kleinfeld that led to his resignation
threw the settlement discussions into disarray.
Kleinfeld stepped down after the company revealed he had
sent an inappropriate letter to Elliott founder Paul Singer
earlier this month. Details of the letter emerged late last
week, with Kleinfeld insinuating in the April 11 note that
Singer had misbehaved at the 2006 World Cup in Germany.
(Additional reporting by Rachit Vats in Bengaluru; Editing by
Martina D'Couto and Meredith Mazzilli)