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The Timken Company
commented on the Schedule 13D filed today by
California State Teachers' Retirement System (CalSTRS) and Relational
Investors LLC with the U.S. Securities and Exchange Commission. In the
filing, CalSTRS and Relational disclosed that their group owns 6.15 percent of
Timken shares and urged the company to spin off its Steel Business into a
separate company.
"Timken is always open to constructive input from shareholders and has had
meetings with Relational to listen to their views," said James W. Griffith,
president and CEO of The Timken Company. "The Board and our management team
regularly evaluate the optimal allocation of capital to generate shareholder
value, including capital expenditures, pension funding, acquisitions,
divestitures and returning capital to shareholders in the form of dividends
and share repurchases. As part of this process, over the years we have
carefully evaluated separating the steel and bearing businesses. This
includes a thorough review with our Board this summer of Relational's
proposal, with input from outside financial advisors.
"As a market leader in high-quality engineered steel products, our Steel
Business leverages the same expertise and know-how that we apply across our
businesses. We have significant technology, cost and revenue synergies
between our bearing and steel businesses as well as diversification benefits
in continuing to operate under our current structure," Griffith said. "These
synergies and benefits, coupled with a potential reduction in financial
flexibility, among other factors, led the Board to conclude that the
separation of the businesses at this time would not be in the best interests
of Timken shareholders."
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