Nelson Peltz‘s Trian Fund Management has recently disclosed that it has nominated four director candidates to be elected to the board of E I Du Pont De Nemours And Co (NYSE:DD) at the 2015 Annual Meeting of Stockholders. Trian Fund owns some 24.4 million shares of the company, the stake represeting around 2.7% of the company and has a value of some $1.80 billion.
Nelson Peltz is a famous activist on the Street with investors ranging from pension funds and university endowments to insurance companies. As of the end of last year, the fund owns an equity portfolio worth $9.43 billion, which contains only 11 positions mainly in consumer goods, financial and services stocks. Moreover, the fund has increased its positions in only two companies during the last quarter of 2014, one of which is E I Du Pont De Nemours And Co (NYSE:DD), in which the stake has been increased by 17.35 million shares. In this way, following the increase, E I Du Pont currently represents the largest equity position in the fund’s equity portfolio. Trian also holds some 17.87 million shares of PepsiCo, Inc. (NYSE:PEP), whose stock gained 46% over the last three years. The third-largest equity position is represented by Mondelez International Inc (NASDAQ:MDLZ), in which the fund has increased its stake by 10% on the quarter to 46.30 million shares. The stock of Mondelez gained around 30% since the fund added the company to its equity portfolio during the first quarter of 2013.
As it was mentioned earlier, Trian has substantially increased its stake in E I Du Pont De Nemours And Co (NYSE:DD) during the fourth quarter of last year, which makes the holding the largest equity investment in terms of value, amassing 19% of the 13F portfolio. Trian initiated a position in the company during the second quarter of 2013, initially holding 5.78 million shares. Meanwhile, the stock of the company gained around 30%. Moreover, following the increase, Trian has become one of the largest institutional investors holding the stock.
In this way, being an activist investor with a significant position, Trian Partners has engaged in discussions with the company regarding some issues such as a decline in earnings per share, organic revenue growth that came below its peers in five of E I Du Pont De Nemours And Co (NYSE:DD)’s seven segments, and lowering its guidance for the third year in a row.
Trian considers that the current board of DuPont has not held the management accountable for the underperformance of the company. Moreover, the investor believes that the board has been disconnected from shareholders, which is shown in the latest moves such as the spin-off of its performance chemical segment. The spin-off has been conducted with poor corporate governance, and punitive anti-takeover measures, such as a claffied board, or a high 35% threshold of stockholders to call a special meeting among others, Trian said in a press release.
Therefore, the investor considers that E I Du Pont De Nemours And Co (NYSE:DD)’s board needs more oversight and new perspectives, which is why Trian has nominated four directors that include Nelson Peltz, John H. Myers, Arthur B. Winkleblack, and Robert J. Zatta.
Mr. Peltz also serves on the board of directors of Mondelez International, Wendys Co (NASDAQ:WEN), and The Madison Square Garden Co (NASDAQ:MSG). Moreover, up until December 2014, Mr. Peltz was also on the board of directors of Legg Mason Inc (NYSE:LM), but he has resigned, while Trian still kept its 11.29% stake in the company (which makes the fund one of the largest shareholders).
In addition to Trian Fund Management, some other funds among those that we track hold long positions in E I Du Pont De Nemours And Co (NYSE:DD), although in the previous round of 13F filings, we have seen a decrease in interest in the company from investors, the number of funds decreasing by 9 to 33, while the aggregate value of the stakes held by these funds fell by $77.64 million to $908.97 million. However, other funds hold less significant positions in the company. For example, John A. Levin’s Levin Capital Strategies held 1.04 million shares as of the end of September, while Larry Robbins’ Glenview Capital initiated a position with 787,200 shares.
Disclosure: none
