Trian Said to Prepare New DuPont Strategy PaperJack Kaskey
Trian Fund Management LP, the activist investor advocating a breakup of DuPont Co., is preparing to publish a new strategy paper for the chemical company after failing to reach an agreement over demands for four board seats.
The fresh so-called white paper will be published as soon as this week, according to a person familiar with Trian’s thinking, who asked not to be identified because the plans aren’t yet public.
Trian, co-founded by Nelson Peltz, began a proxy battle in January. Its previous white paper, published in September and no longer posted on its website, detailed its argument for splitting DuPont into two companies to separate businesses with faster growing earnings from those that are more cyclical.
DuPont last week said the latest talks with Trian failed to yield an accord after Peltz insisted he be named to the board. The company appointed two new independent directors and is spinning off its performance chemicals unit, cutting costs and repurchasing shares, moves that were all applauded by Trian.
“DuPont has basically been doing what Trian wanted, so the case for them gets tougher and tougher,” Kevin Walkush, who helps manage $5.4 billion including DuPont shares in the Jensen Quality Growth Fund, said by phone Tuesday from Lake Oswego, Oregon. “Why would they actually need to be on the board now?”
DuPont’s new board choices were popular with investors, increasing pressure on Trian to bolster its case, said Jim Sheehan, an analyst at Suntrust Robinson Humphrey Inc.
It would make sense for Trian “to add more firepower to their argument” with a revised paper, Sheehan, who rates DuPont a hold, said by phone Tuesday from Atlanta.
DuPont rose as much as $1.02 to $77 after the close of regular hours, before trading at $75.98 at 5:19 p.m. on Tuesday in New York. The shares have gained 20 percent in the past year.
A spokesman for DuPont declined to comment on the forthcoming paper. A Trian spokeswoman didn’t immediately return a call seeking comment.
Investors in DuPont will vote on all the company’s directors at its annual meeting in April.