Activist investor Trian Fund Management LP has raised the stakes in its battle with chemicals and plastics giant DuPont Co. by nominating four candidates for the firm's board of directors.
“Trian believes the DuPont board has not held management accountable for continuing underperformance and repeated failures to deliver publicly stated revenue and earnings targets,” officials with New York-based Trian said in a Jan. 8 news release.
Trian's four nominees for the DuPont board are:
• Trian CEO and founding partner Nelson Peltz, who also serves on the boards of Mondelez International, Wendy's Co. and Madison Square Garden Co.
• Legg Mason Inc. director John Myers, who formerly was president and CEO of GE Asset Management.
• Former H.J. Heinz Co. executive Arthur Winkleblack, who also serves as director of RTI International Metals Inc. and Church & Dwight Co. Inc.
• Robert Zatta, a longtime executive with specialty chemicals maker Rockwood Holdings Inc.
Officials with Wilmington, Del.-based DuPont responded in a Jan. 8 statement by saying that the firm's financial performance has exceeded that of its peers over the last five years. They added that the board's corporate governance committee will review Trian's nominees and make a recommendation to shareholders.
“In the interim,” DuPont officials said, “we will remain laser-focused on executing our plan, which has already delivered and continues to drive superior value to our shareholders.”
DuPont and Trian — which owns about 3 percent of DuPont stock — have been battling for more than a year.
In November 2013, DuPont announced plans to spin off its Performance Chemicals unit — including Teflon-brand fluoropolymer and the firm's titanium dioxide business — into a separate public company. That spinoff is expected to be completed by mid-2015, with the new firm operating as Chemours Co.
Trian officials then said in September that in addition to that spinoff, DuPont should split itself into two separate firms, including one that would contain its Performance Materials unit. That unit makes several plastic resins, including nylon and PBT, as well as polyester and nylon film.
DuPont ranks as one of the world's largest chemicals firms with full-year sales of almost $36 billion in 2013. In the first nine months of 2014, DuPont's sales fell 2 percent to $27.3 billion vs. the same period in 2013, while the firm's profit tumbled almost 40 percent to $2.9 billion in the same comparison.
On Wall Street, DuPont's per-share stock price was near $66 in mid-October but had improved to just under $74 in early trading Jan. 9.
DuPont now is the third plastics-related public company to tangle with activist investors in recent months. In November, Midland, Mich.-based Dow Chemical Co. ended a dispute with investor Third Point LLC by adding four new members to its board.
Last month, investor Barington Capital Group LP nominated three directors for the board of Beachwood, Ohio-based Omnova Solutions Inc., whose products include polymer emulsions and plastic laminates. Omnova officials said they're “taking aggressive actions to strengthen the company,” but they did not directly comment on Barington's nominations.