A report made the rounds last week that activist investor Nelson Peltz and his Trian Fund Management had bought a stake in DuPont.
DuPont shares rose to a 13-year high and the speculation made for good talk around the water cooler.
Peltz wouldn’t talk about DuPont in an interview with CNBC, which ran with the report.
The news led to a lot of speculation on whether Peltz would press for a break-up of the company in an effort to boost its stock price. Peltz could also believe the stock is underpriced.
DuPont, under CEO Ellen Kullman, has been given high marks for its strategy of investing in fast-growing product lines and finding new uses for mainstays like Kevlar.
It is also not afraid to shed legacy businesses like the automotive paint unit which went for $4.9 billion to the Carlyle Group. The business has been renamed Axalta and is based in Wilmington. Another big plus is the company’s DuPont Pioneer seed unit that is tapping into a strong agribusiness market.
Peltz is not known as a patient investor. He invested in ketchup-maker Heinz and pushed for changes at the company, which was later snapped up by Warren Buffet’s Berkshire Hathaway. As Fortune noted in a recent story, his firm rolls out white papers suggesting changes at his investments.
For now, DuPont will watch for regulatory filings that would pop up if Peltz does buy up a 5% stake and perhaps a white paper.
The upside and downside of Frontier
Those cheering on Frontier Airlines and its effort to build traffic in Delaware saw the upside and possible downside in the last couple of weeks.
The carrier moved quickly to sign a five-year lease with Trenton-Mercer Airport in New Jersey, thanks to a strong start from that destination. Meanwhile, Frontier will halt four weekly flights from the home of Notre Dame University to Denver in September. The South Bend Tribune quoted airport officials as saying the service was not profitable when it came to connecting to flights from Denver to the West Coast.
Frontier faced competition in the South Bend market with feeder airlines for United and Delta offering service, along with discounter Allegiant. Frontier is the only carrier at New Castle, which has been without commercial service for several years.
Frontier is using a similar strategy at the New Castle Airport (Wilmington/Philadelphia ILG) and Mercer with four weekly flights to Denver. At the same time, Frontier is hedging its bets in New Castle with four and later this year five other non-stop cities that include Florida airports, Houston and Chicago Midway.
The same strategy is in place at Trenton-Mercer airport where the carrier flies to 10 cities. Service will cease for a time in the fall due to runway repairs.
Frontier has been shrinking as it works to find profitable markets. The most recent traffic report showed the number of available seat miles is down 19 percent from a year ago. However, the airline was able to fill more than 90 percent of its seats.
At the same time, the South Bend decision shows that Frontier will not wait forever for a market to become profitable. The airline has been offering the service from West Bend for less than a year.. Click on this link for the story from the South Bend Tribune.
