Gamco Investors Pressures Steel Excel Inc (OTCMKTS:SXCL).

Gamco Investors has disclosed owning 571,873 shares in Steel Excel Inc (OTCMKTS:SXCL). The stake is equivalent to 5.26% of the company’s common stock.

Gamco, Gabelli Funds and their affiliates collectively own 1.3 million shares in SXCL, representing 11.68% of the company’s equity.

Steel Excel is selling to Steel Partners Holdings L.P. (NYSE: SPLP), which already owns 64% of its outstanding shares. As such, to complete the takeover, Steel Partners has launched a tender offer to acquire remaining 36% of Steel Excel that it doesn’t already own.

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Steel Partners is offering $17.80 in the form of private preferred units for every share of Steel Excel in the tender offer. The units will have a 9-year term and will carry a coupon of 6%. The tender agreement gives Steel Partners the right to redeem the units at any time for cash or its common stock.

But Gamco has reservations with the terms of the tender offer as outlined in a securities letter. For instance, it wants the preferred units to be listed on the public market. Additionally, the fund seeks clarity on whether the units will accumulate dividends. Gamco further wants assurance that the units can be monetized after three years.

The fund said in the letter that it would be reluctant to tender its shares if it is not satisfied with the terms of the takeover.

Steel Partners needs to get a majority of the stake it doesn’t already own tendered for the transaction to be successful. With Gamco and affiliates owning nearly 12%, its backing of the deal is important, but it has begun raising questions over the transaction.

Gamco’s Other Large Stake

Gamco recently reported addition to its position in National Fuel Gas Co. (NYSE:NFG), where it now owns 3.37 million shares, equivalent to 3.95% of the company’s equity. The fund earlier owned 3.30 million shares in the company. Also,

Gamco also increased its holding in Internap Corp (NASDAQ:INAP) to 7.97 million shares, giving it 13.86% equity stake in the company. The fund owned 7.33 million shares in the company at the end of 3Q16.