Chemicals

DuPont investors: give Peltz a chance

27 Apr 2015

Proxy firm ISS is backing the activist and a second nominee. The case isn’t very strong. But Peltz on his own has a track record and a $1.8 bln stake. He’d get a year and then it would be up to the $65 bln chemical group whether to give him an age waiver to stand for re-election.

Costs of split help DuPont in activist fight

7 Apr 2015

The $65 bln chemical maker says Nelson Peltz’s proposed breakup would bring dis-synergies adding up to over $10 bln in present value. The numbers are plausible. Maybe slicing up DuPont would make value-adding cuts easier to deliver – but that’s a tough case for Peltz to make.

Dow Chemical tempts fate with $5 bln chlorine sale

27 Mar 2015

The company is offloading its bleach and vinyl-related chemicals to smaller rival Olin using the esoteric reverse Morris Trust structure. The valuation looks solid, especially considering the tax savings. Yet investors should remain wary given the history of such complex deals.

Starwood and Grace show that "proactivism" can pay

11 Feb 2015

Without any visible activist involvement, the hotel chain decided to spin off its timeshare business, while chemical maker W.R. Grace volunteered to split in two. Investors loved the deals. Uppity shareholders aren’t alone in wising up to carve-up potential – boards are too.

DuPont drives wedge between shareholders and Peltz

5 Feb 2015

Adding two turnaround vets to the $70 bln chemical giant’s board may make shareholders think twice about voting a rival slate from Nelson Peltz’s Trian. DuPont says the activist nixed an offer to add one of his picks because he wanted the spot. He may just have been outplayed.

DuPont’s macro woes hand Nelson Peltz advantage

27 Jan 2015

The $67 bln chemical giant is promising more cuts and a bigger buyback to fend off the activist investor. But it’s already barely hitting estimates. A stronger dollar and falling commodity prices will make that even harder in 2015. DuPont boss Ellen Kullman is on the back foot.

Proxy fight as much about Peltz’s Trian as DuPont

9 Jan 2015

The billionaire activist is seeking four board seats at the chemicals group, his first public contest since Heinz nine years ago. Flexing muscle sends a message to other stubborn targets, like Pepsi. It also gives younger staff at Trian Partners experience in the trenches.

Saint-Gobain’s deal cunning could backfire

8 Dec 2014

The French materials group is seizing control of Swiss peer Sika by paying $2.8 bln for a minority family stake which has majority voting rights. Sika’s board is laudably indignant. And Saint-Gobain’s tactics have a hidden cost of upsetting other investors and the target’s staff.

DuPont chief bobbles rebuttal to Peltz attack

28 Oct 2014

CEO Ellen Kullman touted the $62 bln chemical giant’s scale and research capabilities in opposing the activist’s call for a breakup. But she offered no hard numbers to counter Peltz’s claim that the company could lop off $4 bln in excess costs. That was a missed opportunity.

Rob Cox: Is "stranded costs" a euphemism for fat?

23 Sep 2014

The answer to that question may determine the winner in the latest activist battle to captivate Wall Street: Nelson Peltz’s siege of DuPont. The billionaire’s controversial arithmetic suggests the chemicals giant has grown bloated over its 212 years. He’s on to something.

Peltz takes the long, hard road with DuPont

17 Sep 2014

The activist wants the $60 bln U.S. giant to separate into a fast-growth agriculture unit and a cash-generating chemicals rump. At DuPont’s trading multiple, though, just splitting won’t boost the stock much. Cost-cutting may create more sustainable value, but it’s a harder path.

Battery wager should give chemicals maker a jolt

15 Jul 2014

Albemarle’s $6.2 bln deal for rival Rockwood is a big bet on demand for lithium-ion power cells. Its investors were less than electrified, but cost savings cover the premium offered – and owning a low-cost producer of lithium is a smart play on the rise of electric cars.

Evonik in $400 mln soccer deal it doesn’t need

30 Jun 2014

The German specialty chemicals company is buying a 9 percent stake in a first-tier soccer team, emulating Adidas, Audi, Allianz and Bayern Munich. But Evonik’s products don’t reach end users. The potential benefits of its deal with Borussia Dortmund are hazy at best.

Syngenta can yield extra value for shareholders

24 Jun 2014

Shares leapt on a report Syngenta had held abortive talks with rival Monsanto, in the latest tax-driven push by a U.S. acquirer. There would be big antitrust obstacles. Even if no deal emerges, the bid talk should pressure the Swiss agribusiness giant to tend to its own garden.

Rival’s split makes it harder for Dow to resist

10 Mar 2014

FMC, a $10 bln pesticide-to-battery-parts maker, is splitting its fast-growing ag and pharma businesses from stodgier commodity minerals. It’s similar to the breakup activist Dan Loeb wants at Dow Chemical. Boss Andrew Liveris is standing firm. FMC’s move weakens his case.

Dan Loeb finds Dow looking more Sony than Yahoo

12 Feb 2014

The chemicals giant has rebuffed the activist’s idea to split in two. With shares up since Loeb’s pitch, making a financial case for a breakup is harder. That may leave Loeb waging a less aggressive campaign, as he has at Sony, rather than suiting up for a Yahoo-style proxy war.

Merck share price slump pumps up M&A pressure

27 Jan 2014

Is anyone worth 880 million euros? Merck stock dropped 10 percent after its finance chief left abruptly. The plunge reflects the German pharma group’s challenges and inflated hopes of transformative M&A. Quick completion of its AZ Electronics purchase would calm fraying nerves.

Dan Loeb puts the right accelerant in Dow Chemical

21 Jan 2014

The activist investor wants the company to hive off its petrochemicals unit, a more aggressive move than CEO Andrew Liveris has hinted at. Loeb’s analysis looks optimistic, but a sum-of-the-parts analysis suggests merely breaking up Dow could boost its value by a fifth.

DuPont division ought to paint happy picture

25 Oct 2013

Spinning off commodity chemicals used in pigments will give investors in the U.S. chemicals giant a choice between a cash-generating mature business and an innovative, growth-oriented one. It’s a sensible split, but the rump needs to re-rate for the shares to see big new gains.

Dow Chemical can’t embrace shale gas fast enough

24 Oct 2013

Volatile oil prices led the U.S. chemicals giant to miss on earnings. Meanwhile, products based on cheap natural gas boomed. No wonder Dow is shedding crude-linked assets at a faster clip to invest in a gassier future. It’s another example of shale transforming American industry.