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

Image

Barington may force a vote for Omnova board at annual meeting

January 28, 2015 3:52 pm ET

It looks like the battle between Omnova Solutions and an activist investor is heading to a vote.    More

Image

PolyOne sees sales, earnings per share climb, profit decline

January 28, 2015 3:00 pm ET

North American compounding leader PolyOne Corp. posted record adjusted earnings per share in 2014, even as the firm's sales saw modest growth and its ...    More

Image

China XD to catch up on Sichuan project

January 28, 2015 2:41 pm ET

Automotive compounder China XD Plastics Co. Ltd. (Nasdaq: CXDC) has been working on its fourth production base in Nanchong, Sichuan province since...    More

Image

Sika opens negotiations to acquire Axson Technologies

January 28, 2015 12:17 pm ET

Specialty chemicals maker Sika AG has entered into exclusive negotiations with Axson SAS management and shareholders to acquire its epoxy and...    More

Image

Citadel opens second compounding facility in China, near Shanghai

January 27, 2015 3:22 pm ET

Citadel Plastics Inc., the American manufacturer of thermoplastic and engineered composite compounds, has opened its second facility in China, outside...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events