Steelmaker Cleveland-Cliffs (CLF), an enormous buyer of Norfolk Southern (NYSE:NSC), got here out in assist of activist Ancora Holdings in its proxy battle with the railroad firm.
“As one of the largest customers of Norfolk Southern as well as a meaningful supplier of steel rails, I am writing to express my support in your current proxy fight with Norfolk Southern,” Cliffs CEO Lourenco Goncalves wrote in a letter to Ancora on Saturday.
Ancora, which has amassed a $1B stake in NSC, has been engaged in a proxy struggle since February to oust CEO Alan Shaw and set up former UPS (UPS) COO Jim Barber as the corporate’s CEO and former CSX government Jamie Boychuk as COO. Ancora has additionally outlined a three-year plan to chop prices.
“As a matter of fact, the success Cleveland-Cliffs has enjoyed during the last ten years would be impossible if not for the successful activist campaign we waged and won in 2014 against an entrenched board,” Goncalves wrote within the letter that was considered by Seeking Alpha. “We believe in shareholder activism when the activist has a plan and knows how to execute the plan. That seems to be the case of your current effort, and therefore you have my support.”
The Cliffs (CLF) assist comes after a railroad employees’ union, the Brotherhood of Locomotive Engineers and Trainmen, on Friday stated it was in favor of ousting Norfolk Southern’s (NSC) administration, backing a marketing campaign by Ancora so as to add seven administrators to the board and alter the course of the railroad operator.
This leaves union assist cut up, with the American Federation of Labor and Congress of Industrial Organization, backing administration over Ancora amid fears that Ancora’s plan would result in unsafe understaffing on the railroad.
The proxy vote is about for May 9.