Activist hedge fund Elliott Management released the private letter written by Arconic’s former chief executive, Klaus Kleinfeld, which consequently led to his resignation, and their response to the letter and Arconic’s statement on April 17.
Elliott said late on Wednesday that Arconic (ARNC) had created a “public frenzy” for further information and that it had no choice but to make the letter and their response public.
Arconic on Monday said that Kleinfeld resigned on mutual agreement after the specialty metals maker found he sent a letter in “poor judgment” to Elliott Management, with whom it is embroiled in a proxy war and which used the chance to again criticize the company’s board.
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Elliott, run by activist investor Paul Singer, said the letter “read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations” and that it immediately informed Arconic’s board of the letter.
Kleinfeld wrote to Singer on April 11 mentioning Singer’s family trip to Germany in 2006, when he attended the World Cup, and enclosed the official ball of the FIFA World Championships 2006 as a “souvenir.”
After learning of this letter, Elliott‘s general counsel, Richard Zabel, wrote to Arconic’s board saying that “this is highly inappropriate behavior by anyone and certainly by the CEO of a regulated, publicly traded company, in the midst of a proxy contest.”
Arconic on Monday cited this letter as the reason for Kleinfeld stepping down from its board.
“This decision was not made in response to the proxy fight or Elliott Management’s criticisms of the company’s strategy, leadership or performance…” the company said in its statement on April 17 following Kleinfeld’s departure.
Zabel made it clear to Arconic in the letter sent on April 17 that the changes in leadership did not fully address all of the concerns about the CEO’s conduct for them or for the company.
Elliott said in February it has raised its stake in Arconic to about 13%.
Kleinfeld had served as Alcoa‘s (AA) CEO for eight years and oversaw the company’s split-up into Arconic and Alcoa last year.
