DuPont wins board proxy fight against activist investor Peltz

Wed May 13, 2015 6:07pm EDT
 
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By Tom Hals

WILMINGTON, Del. (Reuters) - DuPont (DD.N: Quote) repelled a board challenge from activist investor Nelson Peltz on Wednesday, dealing him a surprising blow after shareholders backed all 12 directors nominated by the U.S. chemical conglomerate's management.

Peltz's Trian Fund Management had sought four seats on the board, including one for himself, and had pushed the 213-year-old company to split its businesses to unlock more value for shareholders.

DuPont stock closed down 6.8 percent at $69.33, making it the top percentage loser in the Standard & Poor's 500 index .SPX. This was the stock's biggest single-day decline since October 2012, and, with 33.5 million shares changing hands, this was the busiest trading day in the company's history.

The vote ends a high-stakes corporate drama that revved up in January when Trian announced its dissident slate. The hedge fund holds a 2.7 percent stake in DuPont, making it the company's fifth-largest shareholder.

DuPont won the backing of three of its largest shareholders, Vanguard Group, State Street Global and BlackRock Institutional Trust, which are index funds, according to a source close to the matter. Trian won the majority of non-index institutions and would have prevailed had one of those three index funds voted differently, the source said.

DuPont Chief Executive Officer Ellen Kullman said the company spent several months explaining to investors how it is retooling its business. A key focus has been the planned spinoff of its performance chemicals business, which supplies titanium dioxide products and Teflon coatings, in the coming weeks.

“We don’t tell our story well enough and have undergone a lot of change," Kullman told reporters at the annual meeting, which drew 400 shareholders in DuPont's hometown of Wilmington, Delaware.

DuPont, which said it spent $15 million on its shareholder campaign, also reached out to its retail investor base, which accounts for more than a third of shares.   Continued...

 
A view of the Dupont logo on a sign at the Dupont  Chestnut Run Plaza  facility near Wilmington, Delaware, April 17, 2012.  REUTERS/Tim Shaffer