Investor group plans to nominate three directors to Ferro's board

By Scott Suttell
CRAIN'S CLEVELAND BUSINESS

Published: January 25, 2013 1:17 pm ET
Updated: January 25, 2013 1:22 pm ET

Related to this story

Topics Materials, Polypropylene, Materials Suppliers
Companies & Associations Ferro Corp.

MAYFIELD HEIGHTS, OHIO -- A group of investors in specialty chemicals maker Ferro Corp. says it plans to nominate three directors for election to the company's board.

The group calls itself the Shareholder Committee for the Future of Ferro and is led by FrontFour Capital Group LLC of Stamford, Conn., and Quinpario Partners LLC of New York. It said it is nominating the three director candidates — David A. Lorber, Jeffry N. Quinn and Nadim Z. Qureshi — because it is concerned about Mayfield Heights-based Ferro's "historic and current under-performance."

In November, James Kirsch, chairman, president and CEO of Ferro, resigned from those posts, less than three weeks after the company on Oct. 30 posted a third-quarter loss of $316 million as it absorbed significant charges related in part to its beleaguered solar pastes business.

Peter Thomas, Ferro's operating vice president of polymer and ceramic engineered materials, is serving as interim president and CEO.

The investor group also issued an open letter to Ferro shareholders. Among the letter's highlights:

• "The operating performance of the company continues to deteriorate and the share price as of Dec. 31, 2012, has declined by 15 percent, 49 percent, and 79 percent over the past one, three, and five calendar years, respectively. The ultimate scorecard of any board of directors and its management team is the creation of shareholder value. In the case of Ferro, the results speak for themselves, and not in a positive way. Left to its own devices, and allowed to maintain the status quo, we are concerned that the unsatisfactory past performance of the current Board and its management team is a precursor of further disappointing performance to come. Ferro has reached a critical juncture and further shareholder value must not be destroyed."

• The director nominees "are leading executives who have track records of creating shareholder value and will offer new perspective and insights to enhance sustainable long-term value and optimize the business for the benefit of all shareholders."

• 2013 is "a pivotal year" for Ferro. "With a Chief Executive Officer search underway and strategic alternatives being considered for the solar-paste business, many important decisions need to be made. We are concerned that given their poor past performance, the company's leadership is ill equipped to make the appropriate decisions to restore shareholder value."

• "Management's articulated strategy and its lackluster execution on that strategy have consistently failed to deliver results. Ferro's portfolio of assets is haphazard and illogically structured, the company's operating margins trail its specialty chemical peers, investments in underperforming businesses have continued to be authorized by the board, and the Board has continuously approved budgets with excessive SG&A levels."

• "With focus, Ferro can improve and grow its product offering, gain market share, and deliver to its shareholders improved profit margins and cash flow. The opportunity to transform and create value is now."

Ferro spokeswoman Mary Abood said company officials "have received and are reviewing the communication" from the group but would not comment immediately.


Comments

Investor group plans to nominate three directors to Ferro's board

By Scott Suttell
CRAIN'S CLEVELAND BUSINESS

Published: January 25, 2013 1:17 pm ET
Updated: January 25, 2013 1:22 pm ET

Post Your Comments


Back to story


More stories

Axiall resumes operations at damaged Lake Charles PVC feedstock plant

April 15, 2014 4:41 pm ET

Axiall Corp. has resumed operations at its PVC feedstock plant that was damaged by a fire in December.
More

Image

Austria's Greiner building a foothold in the US rigid packaging market

April 15, 2014 1:22 pm ET

Greiner Packaging International GmbH, one of Europe's largest makers of rigid plastic packaging, now wants to make its mark in the United States.    More

Image

Power failure shuts down two PE resin units in Texas

April 15, 2014 3:35 pm ET

Two polyethylene resin units operated by Chevron Phillips Chemical Co. LP in Baytown, Texas, were closed from April 8-11 because of a power failure.    More

Shell Chemical to host public meetings to discuss plans in Pennsylvania

April 15, 2014 3:27 pm ET

Shell Chemical LP will host two public meetings on April 16 to discuss the possibility of building a major petrochemicals plant in the Pittsburgh...    More

Image

Despite struggles, Europe still key market in global resin picture

April 15, 2014 2:06 pm ET

Challenges and opportunities facing international plastics and chemicals markets were tackled by a trio of top executives at the IHS World Petrochemic...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events