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Bloomberg
Elliott Capital Management urged Thyssenkrupp AG to negotiate a better steel joint venture with Tata Steel Ltd., increasing pressure on the German company’s management to deliver more favorable terms.
In a letter to Thyssenkrupp management, Elliott highlighted the divergence in performance in Tata and Thyssenkrupp’s steel businesses. The weakness in Tata’s recent performance means that a tie-up is now less favorable for Thyssenkrupp, according to Elliott. If the initial deal terms are maintained, it represents a shift of about $2.2 billion less for Thyssenkrupp, the fund said.
The investor views could make it harder for Thyssenkrupp’s CEO Heinrich Hiesinger, who has pledged his future on the deal with Tata, to proceed under the current terms. He still needs to convince the company’s supervisory board to sign off on the joint venture. “This significant divergence in relative valuation should be adequately reflected in the final terms of the steel JV,†Elliott wrote in the letter, which was previously reported by German newspaper Frankfurter Allgemeine Zeitung.