R/€ = 14.41 Change: -0.06
R/$ = 13.24 Change: -0.14
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R/€ = 14.41 Change: -0.06
R/$ = 13.24 Change: -0.14
Au 1263.63 $/oz Change: -1.01
Pt 948.50 $/oz Change: -6.00
 
 
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Ex-Arconic CEO targeted Elliott founder's alleged World Cup antics

21st April 2017 BY: Reuters

NEW YORK – The letter by Arconic CEO Klaus Kleinfeld that led to his resignation earlier this week focused on the alleged behaviour of Paul Singer, founder of $33-billion hedge fund Elliott Management, at the 2006 World Cup in Berlin.

Elliott, which had launched a proxy battle against the specialty metal maker, disclosed the letter to Singer on Thursday after German business magazine WirtschaftsWoche reported details of its contents.

"Quite a few people who accompanied you ... during and especially after the many matches you attended are still full of colourful memories," said the April 11 letter, which contains a signature and Kleinfeld's letterhead.

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Kleinfeld resigned on Monday after Elliott brought the letter to the company's attention. Arconic, which separated from aluminium producer Alcoa Corp last year, said Kleinfeld did not consult the board before sending the letter, which neither side published on Monday.

The saga began late last year with Elliott's campaign to oust Kleinfeld from Arconic, saying its stock performance lagged peers.

Elliott, which owns a 13.2% stake, nominated five directors to the board in January and suggested Larry Lawson, former CEO of aircraft parts supplier Spirit AeroSystems Holdings, should run the company.

Arconic maintained its support for Kleinfeld, whom it said helped rescue the company in 2008 and was a key force behind the spinoff. He was Alcoa's CEO for eight years and then took the helm of Arconic after the split-up in 2016.

The two sides have engaged in a series of public announcements and videos refuting each other's claims.

While Kleinfeld was the main target of Elliott's proxy fight, the hedge fund has said it will press ahead with its campaign and has asked Arconic shareholders to vote for its director nominees at the May 16 shareholder meeting.

After releasing the letter, Elliott said late on Wednesday that Arconic had created a "public frenzy" for further information and that it had no choice but to make the letter and its response public.

"How you celebrated your soccer enthusiasm and the 'great time' you must have had in your Berlin weeks ... left a deep impression," says the letter from Kleinfeld, who sent an official match ball along with the note.

Elliott said the letter "read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations."

After learning of the letter, Elliott General Counsel Richard Zabel wrote to Arconic's board.

"This is highly inappropriate behaviour by anyone and certainly by the CEO of a regulated, publicly traded company, in the midst of a proxy contest," said Zabel's letter, which Elliott also disclosed on Thursday.

On Monday, Arconic said Kleinfeld's resignation was not in response to the proxy fight or Elliott's criticism of the company. 

EDITED BY: Creamer Media Reporter
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