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

Best Places To Work: No. 6, Colors For Plastics

March 4, 2015 12:35 pm ET

Colors For Plastics, which now employs 115 people, started with one man who handled everything.    More

Image

Ineos to combine ABS unit with Styrolution in Americas

March 4, 2015 10:03 am ET

Global materials firm Ineos Group will combine its ABS resin business with its Styrolution unit in the Americas.    More

Image

Obituary: Guido Ghisolfi, PET company executive

March 4, 2015 9:47 am ET

Guido Ghisolfi — a top executive with global PET resin leader Mossi & Ghisolfi Group — has died from an apparent suicide.    More

Image

Bayer to stop MDI production in Brazil

March 4, 2015 9:21 am ET

Bayer AG's Bayer MaterialScience plans to stop production of MDI polyurethane at its plant near Rio de Janeiro in July, removing 55 metric tons per...    More

Image

Best Places To Work: No. 3, Sun Plastech Inc.

March 3, 2015 2:25 pm ET

Sun Plastech Inc., No. 3 on Plastics News' Best Places to Work ranking, offers so many interesting benefits and perks, it's hard to know where to star...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

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

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

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

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

More Events