Rejecting Nippon Steel Would Do More Harm Than Good

There’s this very memorable episode of “The Office” when Michael declares bankruptcy, not realizing this won’t get him out of the financial hole he’s dug for himself. Later, his accountant needs to explain that simply declaring bankruptcy doesn’t actually do anything.

I got flashes of this recently when I saw the news that Cleveland-based Ancora Holdings had declared not bankruptcy but war on the proposed merger between Tokyo-based Nippon Steel and Pittsburgh-based U.S. Steel.

Ancora recently acquired a stake in U.S. Steel. Under threat of a proxy fight, Ancora demands the company pursue a turnaround rather than a merger and will go the mattresses to stop a merger with any company, “domestic or foreign.”