Jan 26 (Reuters) - Activist investor Ancora Holdings is

preparing to wage a proxy battle at U.S. Steel and wants

the company to drop its merger agreement with Japan's Nippon

Steel ( NISTF ), the Wall Street Journal reported on Sunday,

citing sources.

Ancora also intends to rally shareholders around a plan to

oust U.S. Steel's top boss David Burritt, the report said.

The activist investor is not interested in pursuing a sale

of the American steelmaker to another party, the WSJ reported,

adding that Ancora has nominated nine director candidates to the

company's 12-person board, including Stelco's former chief Alan

Kestenbaum.

Ancora, U.S. Steel and Nippon Steel ( NISTF ) did not immediately

respond to Reuters' request for a comment outside regular

business hours.

Earlier this month, former U.S. President Joe Biden blocked

Nippon Steel's ( NISTF ) $14.9 billion deal for U.S Steel, and delayed an

order until June for Nippon to abandon the bid.

The companies have sued the Biden administration for

blocking the acquisition of U.S. Steel by the Japanese company.