Du Pont De Nemours and Co (NYSE:DD) found itself facing the threat of proxy war on Thursday, 8th January, 2015, by none other than its largest shareholder, Nelson Peltz of Trian Management. For a company which has been successful in weathering several storms ever since it was established in 1802, this could prove to be by far the toughest as also the most expensive.
Nelson Peltz has been asking for Du Pont De Nemours and Co (NYSE:DD) to be split into two branches wherein one would be focused on fast growth and the other would be a picture of sickle growth and hence remain open to takeover by a bigger firm. The reason underlying this demand is that Du Pont has, over the decades, evolved into a complex nexus of several businesses, not all of which are performing well. Therefore, instead of continuing on the same path, efforts should be directed towards segregating the profit-making sectors from the non-profit making branches.
Having made a futile attempt to settle the issue with the management, Nelson Peltz threatened Du Pont De Nemours and Co (NYSE:DD) with a proxy war and to this effect released names of four director nominees. Under the banner of Trian Management, it also made public the press release wherein it has highlighted its reasons underlying this drastic step.
Jim Cramer covered the subject on CNBC and expressed the opinion that it is a definite recipe which would send DuPont shares upward to the point of doubling over the next three years. Charles Elson, Professor at the University of Delaware, shared the same opinion when he commented –
“If you are a DuPont shareholder, you don’t need to worry about the fight. You just need to make a decision on who you think best represents your interests. One way or another you will get value out of this.”
All of this points towards one fact – Nelson Peltz is serious about his $24.4 million which he has invested in Du Pont De Nemours and Co (NYSE:DD) shares and intends to play his activist image to the optimum.
This article has been written by Vinita Basu.