E I Du Pont De Nemours And Co (NYSE:DD) has scheduled a shareholder voting session to be held on May 13, concerning the decision to add four new directors to its board on the suggestion of Train Fund Management. The decision has faced some resistance from the CEO of E I Du Pont, Ellen Kullman, who voiced his concerns that the move would overturn the company’s strategy. Her campaign to convince the shareholders to vote against the move is being countered by Train CEO, Nelson Peltz. Both heads have been travelling around the country trying to win shareholders to their sides.
The activist investor has asked DD to simplify its business and deliver better earnings growth. There have been talks of splitting the company to do so, which the Train Fund estimates would save between $2-4 billion per year. Train has also asked the company to cut on its over growing corporate spending and has warned that the company would be held responsible for any faults in its financial data operations.
However, the initial cost of the split has been estimated to be $4 billion, with an additional $1 billion for administration expenses. Mr. Peltz has been pressurizing the company to be a part of its board and split the company into an agriculture and nutrition wing and an industrial wing. He believes that this would give Du Pont a better chance to compete with its rivals in the market.
Du Pont has been using the expenditure of the breakup as an excuse of not going forward with the plan. Additionally, the company also argues that the four proposed directors, that are to be replaced, are well qualified for their jobs. Du Pont also points out that any move to split the company would result in a significant decline of shareholder value.
E I Du Pont De Nemours And Co (NYSE:DD) closed at $70.69, losing 2.95% on April 21. The company has 905.41 million shares being traded in the market, with a 52-week range of $63.70-$80.65.