Relational Investors LLC and CalSTRS File Comprehensive Presentation Urging
Timken to Unlock Shareholder Value by Separating Its Steel and Bearings
Businesses; Timken’s Conglomerate Structure Impairing Shareholder Value
Separation of Timken’s Steel and Bearings Businesses Continues To Gain
Momentum With Investment Community
Management’s Public Excuses For Maintaining Value Impairing Conglomerate
Structure Are Wrong And Ill-Conceived
SAN DIEGO -- February 28, 2013
Relational Investors LLC (“Relational”) and the California State Teachers’
Retirement System (“CalSTRS”), collectively owners of 7.28% of The Timken
Company, (NYSE: TKR) (“Timken” or “the Company”), today filed a comprehensive
presentation for Timken shareholders entitled “Why a Separation of Timken’s
Steel and Bearings Businesses Can Unlock Significant Shareholder Value.” The
presentation further demonstrates the financial and operational logic of
CalSTRS’ shareholder proxy proposal, which would enable Timken shareholders to
vote for separating the two businesses. The presentation elaborates on the
*There is currently a deep under-valuation of Timken’s shares due to the
Company’s ill-conceived conglomerate structure, particularly as compared
to its peers.
*By separating the steel and bearings businesses, Timken would realize
improved operating performance and the investment community could
appropriately value the earnings profile of each business – thus unlocking
the value of these businesses for shareholders and enhancing their
*Each of Timken management’s public excuses to defend the Company’s
conglomerate structure are not supported by empirical evidence.
Relational and CalSTRS have expressed their intent to continue a dialogue with
shareholders and the broader investment community about the value creation
potential of the separation of Timken’s steel and bearings businesses.
Relational and CalSTRS have expressed their concerns about the Board’s
inaction and attempts to ignore the investment community’s clear statements
regarding the impediment to Timken’s stock price, the Company’s conglomerate
structure and the value creation opportunity to be realized from the
separation of Timken’s businesses.
CalSTRS, with the support of Relational, has filed a formal shareholder
proposal to be voted on at this year’s Annual Meeting of Timken shareholders,
recommending that the Company’s Board and management act expeditiously to
effectuate a spin-off of Timken’s steel business segment into a separately
traded public company. Relational fully supports CalSTRS proposal and has made
such support publicly clear with Timken’s Board and its shareholders.
Below is the link to the presentation: “Why a Separation of Timken’s Bearings
and Steel Businesses Can Unlock Significant Shareholder Value”.
About Relational Investors LLC:
Relational Investors LLC, founded in 1996, is a privately held, multi-billion
dollar asset management firm and registered investment adviser. Relational
invests in publicly traded companies that it believes are undervalued in the
marketplace. The firm seeks to engage the management, board of directors, and
shareholders of its portfolio companies in a productive dialogue designed to
build a consensus for positive change to improve shareholder value.
About the California State Teachers Retirement System: The California State
Teachers’ Retirement System, with a portfolio valued at $161.4 billion as of
January 31, 2013, is the largest educator-only pension fund in the world.
CalSTRS administers a hybrid retirement system, consisting of traditional
defined benefit, cash balance and voluntary defined contribution plans, as
well as disability and survivor benefits. CalSTRS serves California's 862,000
public school educators and their families from the state’s 1,600 school
districts, county offices of education and community college districts.
Kekst and Company
Robert Siegfried or Donald C. Cutler
212-521-4832 or 415-852-3903
Okapi Partners LLC
Bruce H. Goldfarb/Charles W. Garske/Geofrey Sorbello
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