MOSCOW (MRC) -- DuPont Co. won the backing of investor advisory group Proxy Mosaic, the first signal the chemical maker may have an edge in next month’s showdown with activist investor Trian Fund Management, said Bloomberg.
In the first of four expected opinions from advisory firms to institutional investors, Proxy Mosaic recommended shareholders support the Wilmington, Delaware-based company’s incumbent directors. "DuPont’s board is one of the few areas of the company that isn’t broken, and it is unclear how the rest of the dissident’s underwhelming candidates will add any value," the New York-based advisory firm said.
Larger proxy advisers Institutional Shareholder Services Inc., Glass Lewis & Co., and Egan-Jones Ratings Co. are expected to issue recommendations in the coming weeks. The opinions aim to influence the vote of fund managers and other shareholders in the increasingly acrimonious battle between Trian and the 212-year-old chemical maker.
Trian co-founder Nelson Peltz is running himself and three others for board seats at DuPont’s May 13 shareholders meeting, saying the company has excessive corporate expenses and should be broken up. Chairman and Chief Executive Officer Ellen Kullman has fought back, arguing integration is key to DuPont’s success and dismantling DuPont would be costly and high-risk.
"While the dissident is long on criticism of the company’s financial performance, it is short on plans for a turnaround," according to Proxy Mosaic, which is run by Brittany Wedereit, a former Glass Lewis vice president.
Kullman is cutting USD1 billion in costs this year and buying back shares to help boost earnings. She plans to spin off DuPont’s performance chemicals business -- maker of pigments, refrigerants and Teflon non-stick coatings -- as a new company called Chemours on July 1.
Trian wants to go further, advocating the separation of DuPont’s faster-growing agriculture and nutrition businesses from more cyclical units such as safety and protection, which makes Kevlar anti-ballistic fiber and Nomex heat-resistant fabric used by firefighters.
DuPont had offered to settle the proxy fight by giving Trian nominee John H. Myers a seat, but those talks ended when Peltz insisted that the seat go to him.
As MRC informed earlier, DuPont Co. said first-quarter profit declined from the previous year, as revenues dropped amid adverse currency and decreased volumes. The company now expects higher-than-previously estimated negative currency impact in 2015, and as a result sees full year earnings at the low end of its prior outlook.
DuPont shareholders will vote to select the board at the company’s annual meeting in April.
DuPont is an American chemical company that was founded in July, 1802. The company manufactures a wide range of chemical products, leading extensive innovative research in this field. The company is the inventor of many unique plastics and other materials, including neoprene, nylon, Teflon, Kevlar, Mylar, Tyvek, etc. DuPont was the developer and main producer of Freon used in the production of refrigeration equipment.