By Jacob Bunge and David Benoit
DuPont Co. struck back at Trian Fund Management LP in a letter
to shareholders that accuses the activist investment firm of using
misleading information and other unfair tactics to gain seats on
its board.
The letter, which DuPont published Tuesday, says Trian is
wrongly claiming credit for the chemical company's strategic moves,
and questions the investment firm's track record in the chemical
business.
DuPont's letter, accompanied by a presentation taking aim at
what the company called "myths" promoted by Trian, marked the
212-year-old company's strongest salvo yet in its escalating battle
with the fund, which last month nominated Trian co-founder Nelson
Peltz and three other candidates to DuPont's board.
"Trian has launched a proxy fight based on misrepresentations,
inaccurate data, and flawed analyses to distract from DuPont's
track record of strong performance," Ellen Kullman, DuPont's
chairman and chief executive, wrote in the letter.
A Trian spokeswoman had no immediate comment.
Trian in a presentation last week claimed credit for driving
changes in DuPont's business and an overall rise in its share price
over the past two years, saying that the firm's presence "has
already made a positive impact" at DuPont.
Trian pointed to DuPont's plans to spin off its performance
chemicals division into a company to be called the Chemours Co., a
cost-cuttingSHY plan that aims to strip out $1 billion in costs by
the end of 2015 and a $5 billion share repurchaseSHY plan as
examples of DuPontSHY actions since Trian made its initial
investment, which has grown to about 2.7% of DuPont's shares.
DuPont's letter rejected those claims. "[I]n fact, we had
initiated planning for the Chemours spinoff well before Trian's
investment," Ms. Kullman wrote.
DuPont also criticized Trian for "backtracking" from earlier
calls to split the rest of DuPont after the Chemours spinoff into
two companiesSHY, one focused on agricultureSHY and nutrition
products, the other on industrial materials.
DuPont said its board had rejected that "high risk" plan anyway,
because it wouldn't pay off for shareholders. Trian has said its
nominees would be open to other plans if they were elected to the
board.
Ms. Kullman's letter took aim at what it called Trian's "only
investment" in the chemicals sector, a stake in specialty chemical
maker Chemtura Corp. Trian co-founder and partner Ed Garden joined
the board of Chemtura in early 2007, shortly after the activist
took a stake in the chemicals giant.
The company had talks with private-equity firms about a buyout
in 2008, according to The Wall Street Journal, but failed to strike
a deal. Ultimately, Mr. Garden left the board in March 2009 and a
week later the company filed for bankruptcy as the U.S. stock
markets plumbed their low point and many chemical companies
struggled with economic fallout from the 2008 financial crisis.
Trian's "board leadership and strategic plan resulted in
Chemtura filing for bankruptcy," Ms. Kullman wrote. A spokesman for
Chemtura declined to comment.
DuPont shares settled 25 cents higher at $76.43 Tuesday, in line
with major stock-market indexes.
Write to Jacob Bunge at jacob.bunge@wsj.com and David Benoit at
david.benoit@wsj.com
Access Investor Kit for Chemtura Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US1638932095
Access Investor Kit for E.I. du Pont de Nemours & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2635341090
Subscribe to WSJ: http://online.wsj.com?mod=djnwires