Activist investor Nelson Peltz of Trian Management is waging a proxy battle against DuPont and has nominated 4 potential members to its 13 person board. It isn’t the suggested appointments DuPont’s CEO Ellen Kullman minds as much as Nelson’s ultimate plan: to split the company up into three segments, including chemicals, agriculture and industrial materials. Management said such a move would “disrupt” the company (and unlike tech, where disruptive is spoken about as a good thing, DuPont is not thrilled). Management said it had “made numerous efforts to engage constructively, ” with Trian, but it had “chosen this path with the potential to disrupt our company at a key stage of execution against our plan.”
Nelson Peltz, who owns a 2.68% stake in the company worth $1.8 billion tried to convince PepsiCo to split up, but management dug in its heels and refused. Peltz thinks that, unlike PepsiCo, Dupont is underperforming its peers, according to Delaware online. Peltz said Dupont has given shareholders a 94% return since 2008 compared to the average 110% from its rivals and has returned one third less than its competitors in the last 20 years. He also pointed out that Gross margins were trailing other chemical companies, particularly in the Industrial Biosciences segment. Peltz said the stock could be 52% higher if the company follows his plan. He also suggested selling its take in Chemours, not least because it tends to be anti-merger.
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DuPont’s management said it is “laser focused on executing our plan” and has delivered superior shareholder value.
