Relational Investors Argue for Timken Co. (TKR) Spin
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This afternoon activist firm Relational Investors revealed a 6.15 percent stake in bearings company Timken Co. (NYSE: TKR). In connection with its stake in the company, Relational announced it would push the company to spin its steel business in an effort to unlock value. Pension giant CalSTRS also has a stake in TKR and will be pushing for a spin.
"Timken's share price does not reflect the indicated trading value of TKR’s Bearings and Specialty Steel business," argued Relational in an August presentation to the Board, noting its valuation discount to peers is "significant".
Spinning off the steel business may help create stability in TKR's high margin bearing business, and considering the absence of synergies with the steel unit, investors could quickly realize gains.
So far, so good. Since Relational announced its stake this afternoon, Timken (NYSE: TKR) stock soared over 12 percent - a good sign for Relational and Co.
For more notable holders of Timken Co. stock click here. For more information on Relational Investors click here.
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"Timken's share price does not reflect the indicated trading value of TKR’s Bearings and Specialty Steel business," argued Relational in an August presentation to the Board, noting its valuation discount to peers is "significant".
Spinning off the steel business may help create stability in TKR's high margin bearing business, and considering the absence of synergies with the steel unit, investors could quickly realize gains.
So far, so good. Since Relational announced its stake this afternoon, Timken (NYSE: TKR) stock soared over 12 percent - a good sign for Relational and Co.
For more notable holders of Timken Co. stock click here. For more information on Relational Investors click here.
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