USX Shareholders Approve Creation of Two Classes of Stock
HOUSTON (AP) _ Shareholders of USX Corp., the nation’s largest steel maker, backed overwhelmingly a plan to split the company’s stock into energy and steel issues which begin trading separately today on the New York Stock Exchange.
The vote on Monday caps a five-year battle by the Pittsburgh-based conglomerate’s largest single shareholder, financier Carl C. Icahn.
Icahn wanted to boost USX’s stock price by separating the cyclical steel business from its energy unit, which includes Houston-based Marathon Oil.
Stockholders at the company’s annual meeting Monday in Houston approved the measure with of 96.4 percent of the voting shares, or 182,952,000 shares. No one spoke in opposition to the plan.
Beginning today, USX stock will be listed as US Steel, or ‘X’ on the ticker, for steel and diversified businesses, and as USX Marathon, or MRO on the ticker, for the energy businesses.
″This will improve the total value of our shares,″ USX chairman Charles A. Corry told stockholders. ″It’s in the best interest of USX and the shareholders.″
Corry said $1.40 a year in dividends will be paid on USX Marathon common stock, and $1.00 a year on US Steel common stock.
USX stock fell 12 1/2 cents a share to $32.87 1/2 on Monday.
Last year, stockholders meeting in Findlay, Ohio, defeated Icahn’s proposal to spin off 80 percent of USX’s steel unit.
Changes at USX come against a backdrop of increasing shareholder activism, particularly among pension funds and other institutional investors. The investors used to dump their stock when they were unhappy with a company’s performance. Now, they are using their stakes as leverage to bring about change.
Corry said he supported the change partly because the energy side of USX was not getting enough attention.
″The thing I complained about to our investor relations guys was that it did seem to me we did not get enough recognition for the energy business we have, which is doing very well.″