The war of words between GrafTech International, a small steel company, and its largest independent shareholder, Nathan Milikowsky, is heating up, and a proxy fight is on the horizon.
Mr. Milikowsky was ousted from the GrafTech board last year, after the company accused him of leaking confidential information to a hedge fund. Mr. Milikowsky said he was forced out because he was questioning the competency of the company’s chief executive, Craig S. Shular.
But even after Mr. Milikowsky was gone, GrafTech made one of the biggest changes he had requested â€" replacing Mr. Shular, which it did earlier this year.
That might have been the end of it. After all, the company was under new leadership, which was Mr. Milikowsky’s stated goal.
But in recent months, Mr. Milikowsky has revived his fight by nominating five new nominees to GrafTech’s board, and lobbying for his own reinstatement to the board. To address the company’s concerns about his own fitness to serve, Mr. Milikowsky proposed that the board hire a new law firm to review the investigation that led to his ouster.
On Monday, GraftTech responded with yet another settlement proposal. It offered to take two of Mr. Milikowsky’s proposed directors. And it said it would consider reinstating Mr. Milikowsky, but only after an arbitration process that could take many months, if not a year or more.
If Mr. Milikowsky were not reinstated after that, the company would bring on another mutually agreed-on director. And the company said that the former chief executive officer would leave the board after this year’s annual meeting, which is set for May 15.
That proposal is unlikely to appease Mr. Milikowsky, who is expected to wage a proxy fight to elect himself and his fellow nominees. Both he and the company will probably file definitive proxy statements in the coming day or two.
That sets up one of the few proxy fights of the season, and poses a question for shareholders who will have to vote on dueling slates of directors: Is Mr. Milikowsky still waging a battle to save the company, or just a campaign to clear his name?
