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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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[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
INLAND STEEL INDUSTRIES INC.
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Notes:
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The following items are included in the employee magazine "Inland Horizon",
Volume 1, No. 2, April 1997:
Q I see that one of the company's large stockholders is trying to force it to
spin off the rest of the distribution business. What does this mean? What
should I do?
A The board of directors has studied this as recently as January 1997, when a
detailed reassessment made clear a spinoff 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 Inland Steel
Industries, the valuation of companies comparable to Ryerson Tull and Inland
Steel Industries, 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.
If you'd like to know more about the company's position, check the proxy
statement that has been mailed to all stockholders.
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[LETTERHEAD OF INLAND STEEL INDUSTRIES]
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April 12, 1997
Dear Fellow Inlander,
Congratulations on delivering improved First Quarter results! The Steel
Company will report operating profit of over $38 million next Monday. It clearly
shows Inland's strategy of Operational Excellence is working. We've made
significant progress in safety, customer performance, productivity, yield and
costs. Your hard work has put us back on track to make Inland the best in the
industry in these critical performance areas. Now let's keep the ball rolling.
I also want to correct some impressions left by recent press coverage. Last
week Inland and U.S. Steel confirmed that we had discussed possible combinations
of our steel manufacturing businesses last year. Inland was not put up for sale.
We hoped to find a way to combine our strengths for the best interests of both
companies. After lengthy and detailed discussions, the talks were terminated
late in the year when we concluded that a combination would not be in Inland's
best interests. We are, however, always looking for ways to make our company
stronger and will continue to do so.
Further, one of our stockholders, Greenway Partners, has proposed that the
Company distribute all of the stock of Ryerson Tull that Inland holds to Inland
shareholders by means of a tax-free spin-off. A nonbinding, but important, vote
will be taken on this proposal at our Annual Meeting of Stockholders in May.
After thorough consideration, our Board of Directors decided that a spin-off of
Ryerson Tull at this time is not in our shareholders' best interests and is
unanimously recommending that shareholders vote against the proposal. The
reasons include the strong belief that a spin-off now would reduce our financial
strength and flexibility, significantly increase our federal income taxes, and
potentially hurt our overall stock valuation. Corporate spin-offs may be the
latest fad, but doing it at Inland now just doesn't make good business sense.
If you are an Inland shareholder, I strongly urge you to vote against this
proposal.
Again, thanks for your efforts in delivering those improved First Quarter
results. Clearly the most reliable and enduring way to increase shareholder
value is to improve operating performance. I encourage you to take pride in our
accomplishments and continue to work hard to make the company even better and
stronger in the months and years ahead.
Sincerely,
/s/ Bob
