Tags: DuPont | Trian | Peltz | Investor

Activist Investor Peltz Asks DuPont to Split Into Two

Wednesday, 17 Sep 2014 07:51 AM

Activist investor Nelson Peltz's Trian Fund Management LP, which holds a $1.6 billion stake in DuPont, called on the chemical conglomerate to separate its high-growth agriculture and other businesses from units that generate strong cash flows.

The company is already hiving off its performance chemical business, which makes materials used in non-stick cookware, refrigerants and a white pigment used in toothpastes.

DuPont should split itself into two companies, one holding the company's agriculture, nutrition and health and industrial biosciences divisions, Trian Fund said in a Sept. 16 letter to DuPont's board released on Wednesday.

The other unit will hold cyclical businesses such as performance materials, safety and protection, electronics and communications.

DuPont has also announced a $5 billion share repurchase program. But Trian Fund said these steps were not enough.

"While we applaud the announced spin-off of Performance Chemicals, the Fresh Start initiative and the $5 billion share buy back authorization, we believe strongly that, by themselves, these moves are not enough to optimize shareholder value," Trian Fund said.

Peltz first disclosed his stake last year and had been in discussion with the company for more than a year.

Trian said its proposal would eliminate $2 billion to $4 billion in annual costs and enable DuPont's separated units to improve performance.

DuPont said late on Tuesday that the company welcomed open communications with shareholders, after the Wall Street Journal reported on Trian Fund's letter.

The company's shares were up 2 percent in $67.15 in very light trading before the bell.

© 2017 Thomson/Reuters. All rights reserved.

   
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Activist investor Nelson Peltz's Trian Fund Management LP, which holds a $1.6 billion stake in DuPont, called on the chemical conglomerate to separate its high-growth agriculture and other businesses from units that generate strong cash flows.
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2014-51-17
Wednesday, 17 Sep 2014 07:51 AM
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