Canadian Plastics

Dow reaches agreement with investor Third Point

Dow Chemical Co., the largest U.S. chemical maker, has avoided a fight with activist investor Third Point LLC after agreeing to add four new independent directors.

November 24, 2014   Canadian Plastics

Dow Chemical Co., the largest U.S. chemical maker, has avoided a fight with activist investor Third Point LLC after agreeing to add four new independent directors.

 

Two Third Point nominees will join the board on January 1, according to a statement from Dow. “Mark Loughridge, Ray Milchovich and R. “Steve” Miller will join the board on January 1, 2015,” Dow said. “Richard Davis will join in May 2015 following the 2015 Annual Meeting of Shareholders.”

 

Third Point, founded by Daniel Loeb, has called for Midland, Mich.-based Dow to focus more on its petrochemicals business or spin it off as a separate company. In a January 2014 letter to investors, Loeb had called on Dow to hire advisors to conduct an assessment of whether its current petrochemical strategy maximizes profits and aligns with Dow’s goal of transforming into a specialty chemicals company. “We believe that Dow would best serve shareholders’ interests by engaging outside advisors to conduct a formal assessment of whether the current petrochemical operational strategy maximizes profits and if these businesses align with Dow’s goal of transforming into a ‘specialty’ chemicals company,” Loeb said in the letter. “The review should explicitly explore whether separating Dow’s petrochemical businesses via a spin-off would drive greater stakeholder value.”

 

The new agreement means that Loeb won’t run a hostile slate of candidates for Dow’s board.


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