DuPont CEO departure buys time to appease Peltz
By Svea Herbst-Bayliss and Michael Flaherty
BOSTON/TORONTO (Reuters) - The departure of DuPont's chairwoman and chief executive Ellen Kullman has bought the U.S. chemical manufacturer a few months' grace to boost its stock price and appease activist investor Nelson Peltz.
Before Kullman's surprise retirement announcement, the billionaire fund manager was considering launching a second attempt to get representation on DuPont's board, people familiar with his thinking said on Tuesday.
"This goes a long way to inoculate the company from another proxy fight," said Damien Park, who works with companies facing pressure from activist shareholders as managing partner at Hedge Fund Solutions.
Representatives for Peltz's Trian Fund Management and DuPont (DD.N: Quote) declined to comment.
Feted with a standing ovation from shareholders in May when she prevented Peltz and three of his nominees from getting onto the DuPont board, Kullman, 59, presided over a 25 percent slide in the stock price in the intervening period, weakening her support among investors.
The 213-year old company, which makes Teflon and Kevlar, has appointed board member Edward Breen, a former CEO of Tyco, as interim chief executive and has hired a search firm to find a permanent replacement for Kullman.
Breen made six companies out of Tyco, a sprawling conglomerate beset by scandal and strategic flipflops, and several large shareholders in DuPont said he had a few months to ramp-up cost-cutting and reverse the stock price decline.
One investor said Breen was the perfect candidate to do the type of work Peltz was pushing for, removing the need for another boardroom battle. Continued...