The proxy battle at DuPont Co. took another turn when shareholder advisor Glass Lewis & Co. recommended the election of Trian Partners chief Russell Peltz to the board of DuPont Co.
This was followed by the firm of Eagan-Jones, which endorsed all four directors nominated by Trian.
The recommendation came after Institutional Shareholder Services endorsed the election of two Trian directors. DuPont could take some solace from the three firms are not unqnimous in their views, recommending board slates of one, two or four directors.
The battle remains something of a puzzle to many observers. As a recent piece in the New York Times Dealbook blog noted, DuPont is not a broken company. The author said a settlement is the best option to avoid even choppier waters if Peltz and Trian win the battle. The author of the piece is Steven Davidoff Solomon, a professor of law at the University of California, Berkeley and the author of books on corporate takeovers.
Points of view vary, even among those backing the Peltz slate. Glass, Lewis praised DuPont’s recent performance, but suggested that Peltz had valid points about the performance of the Wilmington-based company.Dow Jones reported Eagan-Jones issued only a brief statement recommending the four men.
DuPont responded with a brief rebuttal shown below. On Tuesday, DuPont Co. Ellen Kullman issued a letter to shareholders that attacked Trian’s plan.
“Our shareholders support our strategy and our progress and we are confident they will make decisions based on their own independent, fact based assessments. Egan Jones’ three-paragraph analysis is based upon suppositions and hypotheses, completely unsupported by the facts,” DuPont stated.
DuPont has continued to stick with its slate of four nominees, including two outside directors with experience in turning around large companies.
“We are pleased that in its report, Glass Lewis recognizes that “DuPont’s total shareholder returns during management’s tenure, both before and after Trian’s investment, are indicative of strong performance,” the DuPont statement noted.
The statement continued; “Despite its recognition of DuPont’s strong performance, strategic vision and world-class Board, Glass Lewis reached the wrong conclusion in failing to recommend a vote for all 12 of DuPont’s nominees on the white proxy card. For nearly two years, Nelson Peltz has sought representation on the DuPont Board for one reason only: to advance his firm’s high-risk, value destructive agenda to break up and add excessive debt to DuPont, which would result in a less competitive company with weaker prospects for value creation. Glass Lewis noted that “… a break up of DuPont at this juncture is likely not the best alternative to enhance shareholder value.”
DuPont also mentioned Trian had representation on the board of a chemical company that later ended up in bankruptcy proceedings.
“The DuPont Board and management team have been executing a bold, multi-year strategic transformation that is delivering higher growth and higher value now while positioning the company for the future. DuPont does not need a director with a track record of value destruction in our industry and who is relentlessly pursuing a preconceived, high-risk breakup agenda,” the statement concluded.
