(Reuters) - DuPont DD.N rejected hedge fund Trian Fund Management LP’s proposal to add two nominees each to the chemical conglomerate’s board and the board of a unit the company plans to spin off, in a letter to activist investor Nelson Peltz.
The company said on Friday that it was prepared to accept one of Peltz’s nominees, John Myers, in an attempt to end a proxy war with Trian.
Peltz told CNBC on Thursday that DuPont’s offer of one board seat was not enough.
Peltz wants two of his fund’s nominees, including himself, on the DuPont Board and two on the board of Chemours, the performance chemicals business DuPont plans to spin off later this year.
Direct representation by a Trian principal cannot result in a "mutually acceptable resolution", DuPont said in the letter, which follows Peltz's call with DuPont Chief Executive Ellen Kullman on March 11. (1.usa.gov/18jzhqi)
Trian, which owns a 2.7 percent stake in DuPont, has been urging the company to spin off its volatile materials business, a proposal that has been repeatedly rebuffed.
Since its investment, “Trian has been singularly focused on a high-risk agenda to break up and add excessive debt to DuPont,” Kullman said in the letter.
Trian said in February that it was “open-minded” about keeping the company together.
DuPont named two of its own nominees, Ed Breen and Jim Gallogly, as directors last month, rebuffing Peltz’s demand for a board seat.
Peltz told DuPont that he supported Breen and Gallogly, the company said in Friday’s letter.
“With the addition of one of your current nominees, three current DuPont directors would have your express approval and support,” Kullman said.
Rival Dow Chemical DOW.N averted a proxy fight with Dan Loeb’s hedge fund, Third Point LLC, last November, by agreeing to add four independent directors to its board.
DuPont’s shares were little changed in after-market trading on Friday.
Reporting by Kanika Sikka in Bengaluru; Editing by Simon Jennings