Ellwood Group’s recent move to rapidly accumulate a significant minority stake in TimkenSteel Corp. (TMST) touched off a debate over whether the steel producer could be a target and, if so, by what sort of entity. Executives at Canton, Ohio-based TimkenSteel say they have had a ‘long and valued’ relationship with Ellwood, which itself produces stainless steel and specialty alloys. As such, Ellwood is a customer, supplier and competitor of TimkenSteel. Some industry watchers believe Ellwood may want to ultimately acquire or put together some sort of combination with TimkenSteel as a liquidity event for its owners. Others insist that the accumulation indicates that a bigger potential buyer may be lurking in the shadows. In any event, an informal poll of analysts suggests that it will likely be sold in the next two to five years and that an activist could help expedite such a move. In fact, one high-profile insurgent investor said that he has heard from a number of people that TimkenSteel could become an activist target.
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