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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[x] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Inland Steel Industries, Inc.
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(Name of Registrant as Specified In Its Charter)
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The following statement of Inland Steel Industries, Inc. (the "Company"),
in opposition to the proposal of Greenway Partners, L.P. ("Greenway"), submitted
to the Company pursuant to Rule 14a-8 under the Securities Exchange Act of 1934
("the Act") for inclusion in the Company's 1997 Annual Meeting proxy material
and publicized by inclusion in a Schedule 13D filed on behalf of Messrs. Alfred
D. Kingsley, Gary K. Duberstein, Greenway and other affiliated entities, is
filed herewith pursuant to Rule 14a-12(b) under the Act.
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Statement of the Board of Directors in Opposition to Stockholder Proposal
Your Board of Directors understands the views expressed by Proponent. After
careful consideration, however, your Board has concluded that spinning off
Ryerson Tull at this time would NOT be in the best interest of stockholders.
Over a year ago the Board and management began an exhaustive strategic
reassessment of the Company. We took several actions as a result. Among them
were public offerings of Ryerson Tull stock and debt that achieved the primary
benefits of a spin-off -- independent access to capital markets, improved
management focus on each business unit and enhanced investor ability to evaluate
Ryerson Tull. We also recapitalized the Company -- retiring higher-cost debt,
eliminating certain restrictive debt provisions, lowering overall financial
costs and increasing financial flexibility.
As recently as January 1997, the Board again reviewed the costs and
benefits of spinning off Ryerson Tull. Our detailed reassessment, however, made
clear that a spin-off at this time would have serious drawbacks. Some key
reasons are:
. The Company currently has the financial strength and flexibility it needs.
Spinning off Ryerson Tull at this time would diminish this.
. Federal income taxes would increase significantly if Ryerson Tull were spun
off now because its income could no longer be offset by the Company's
substantial tax carryforwards of net operating losses and alternative
minimum tax credits. A spin-off at this time would benefit the Federal tax
collections at the expense of the Company and its stockholders.
. Overall valuation could suffer, based on current equity market conditions,
the trading patterns for equity of Ryerson Tull and the Company, the
valuation of companies comparable to Ryerson Tull and the Company, and
other factors.
. The most reliable and enduring way to increase stockholder value is to
improve operating performance. Since the public offerings and
recapitalization, each business unit has implemented significant new
initiatives to improve results. The Board has unanimously concluded that
improving operating performance is the Company's highest priority.
A SPIN-OFF IS NOT A PANACEA. Selling some Ryerson Tull equity strengthened
our Company. Spinning off the rest at this time would be expensive, would risk
weakening our Company and impairing stockholder value, and would limit your
Board's ability to pursue other alternatives for maximizing stockholder value.
Weighing the risks and benefits of a major corporate action, such as a
spin-off, is a complex and difficult process. It takes in-depth knowledge of the
company and its businesses. Your Board of Directors and management have that
knowledge about the
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Company and are committed to using sound business judgment to maximize
stockholder value and to fulfill our fiduciary duties to all stockholders.
We continue to evaluate a broad range of alternatives for overcoming the
challenges facing the Company. As we said in the public offering, the Company
intends to hold the Ryerson Tull stock but might in the future distribute all or
part of it to the Company's stockholders, or sell it to third parties in one or
more transactions. If and when we believe any such change will benefit the
Company's stockholders, we will take prompt and effective action.
For now, however, the Board has concluded that the possible advantages of a
spin-off simply do not justify all the costs, risks and other disadvantages
involved.
TO PRESERVE STOCKHOLDER VALUE, THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" ADOPTION OF THE PROPOSAL.
