Relational and CalSTRS Assert That True Value of Timken’s Acquisition of
Interlube Cannot Be Realized by Shareholders under Timken’s Conglomerate
SAN DIEGO -- March 13, 2013
Relational Investors LLC (“Relational”) and the California State Teachers’
Retirement System (“CalSTRS”), collectively owners of 7.28% of the shares of
The Timken Company, (NYSE: TKR) (“Timken” or “the Company”) today stated that
the announcement by Timken that it is acquiring Interlube Systems Ltd to
further diversify the Company’s portfolio of businesses underscores Timken's
blind eye to the large conglomerate discount impairing its share price.
Relational stated, “While the Interlube acquisition along with Timken’s
acquisitions of Greenbriar and Wazee over the past months may be sound
acquisitions in terms of supporting the Company’s Bearings business, none of
the true value of these acquisitions can be realized for shareholders as long
as the conglomerate discount continues to impair Timken’s valuation in the
marketplace. We are confident that by splitting Timken’s shares to reflect
independently traded Steel and Bearings businesses, the Company can unlock
significant shareholder value. If the Interlube acquisition complements the
Bearings business as Timken asserts, then shareholders should be allowed to
realize the full value of the Bearings business. Timken’s conglomerate
structure impedes such valuation.
"We urge all shareholders to support CalSTRS’ proxy proposal that Timken’s
Board of Directors and management act expeditiously to engage an investment
banking firm to effectuate a spin-off of Timken’s Steel business segment into
a separately traded public company. Voting FOR the CalSTRS proposal will send
the Timken board a clear statement of what shareholders want,” Relational
On February 28, 2013, Relational and CalSTRS 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 demonstrates the financial and operational logic of CalSTRS’
shareholder proxy proposal, which would enable Timken shareholders to vote for
separating the two businesses.
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/Daniel Yunger/Donald C. Cutler
212-521-4800 or 415-852-3903
Okapi Partners LLC
Bruce H. Goldfarb/Charles W. Garske/Geoffrey Sorbello
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