The appointments are poke in the eye of Nelson Peltz and his Trian Fund Management, which have been actively pursuing a break-up of DuPont and last month nominated four candidates for the board election at the 2015 annual stockholders’ meeting. Reuters reported on Tuesday that DuPont interviewed the four candidates put forward by Trian in a move that some observers believed could have led to a compromise on the composition of the board.
DuPont CEO and Chairman Ellen Kullman is apparently not going to give an inch in the assault from Trian. The private equity firm has argued that breaking the company into three pieces (including the spin-off of its performance chemicals group into Chemours) would eliminate an entire layer of corporate overhead and bureaucracy, would be a “catalyst” to design a new cost structure, add accountability for R&D expenditures and ensure a “high probability of valuation re-rating.”
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Kullman has argued that maintaining DuPont’s current conglomerate structure and its diversified portfolio of products benefit from a strong capital base, integrated research and a 200-year-old global brand. According to report in Fortune, since Kullman took over in 2009, DuPont has delivered gains of 256%, including dividends, to shareholders, compared with a 159% return over the same period for the S&P 500.
The snubbing of Trian’s nominees is almost certain lead to a proxy battle ahead of the DuPont’s annual meeting, typically held in April. In January Trian said it owned approximately 24.4 million DuPont shares, worth about $1.8 billion at the time. That is about 2.7% of DuPont’s outstanding, shares according to the latest total.
DuPont shares traded up about 0.7% in the late morning on Thursday, at $74.27 in a 52-week range of $61.3 to $75.82.
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