Trian Fund Management LP has put E I Du Pont De Nemours And Co (NYSE:DD) in a fix by asking for board seats. The company entangled into a proxy war with its activist investor has decided to accept the decision of its voters in this regard. The company said that it would conduct its annual shareholder meeting on May 13, where the outcome will be clear.
Demands and proposals
Trian has been demanding four seats on E I Du Pont De Nemours And Co (NYSE:DD)’s board, including one for its CEO Nelson Peltz. The activist firm has been asking the company to split into two and hence its objective behind demand for board seats is to push its proposal into execution.
Earlier this month, E I Du Pont De Nemours And Co (NYSE:DD) had rejected the Trian’s proposal to add nominees to its board and the board of the split-off company. Later, the company agreed to add only one nominee to its board but did not agree on taking Peltz. A Reuters report cited a source stating that the reason for not taking Peltz is that he would have come hard on the company on split-off subject matter.
Split-off efficient or underestimated
E I Du Pont De Nemours And Co (NYSE:DD) has already decided to split off its chemicals business, but Peltz is pushing for a separate split-off of its materials business from its health, nutrition, agriculture and industrial biosciences divisions. However, E I Du Pont De Nemours And Co (NYSE:DD) is not in a mood to listen to Peltz as it argued that keeping the business together will help it to take advantage of global scale, science platform, market access and brand. In February, Peltz softened his stance stating that the firm is “open-minded” in keeping the company together. But, the same outlook again changed earlier this month after Peltz expressed that split-off will help the company get rid of $2-$4 billion in costs.
E I Du Pont De Nemours And Co (NYSE:DD)’s CEO Ellen Kullman responded that Trian’s proposal has overly underestimated the separation costs and dis synergies associated with the proposal. It has now left it to the voters to decide the best solution to the problem.