Nelson Peltz’s Trian Partners has provided updates on two of its key activist positions in recent days, officially launching their proxy fight against E. I. du Pont de Nemours and Company (NYSE: DD), as well as greatly increasing their stake in Ingersoll-Rand PLC (NYSE:IR). Trian holds 24.31 million shares in the 212-year-old DuPont, and can now boast a 15.38 million share stake in Ingersoll-Rand, an increase of 2.56 million shares from the 12.82 million they held at the end of 2014.
Trian Partners, the activist fund founded in 2005 by Peltz along with Peter May and Edward Garden, stepped up its attack on E. I. du Pont de Nemours and Company (NYSE: DD), filing a 78-page report yesterday that detailed the company’s underperformance as it officially filed a preliminary proxy statement with regulators, to have its four nominees appointed to DuPont’s board.
The new filing comes a week after E. I. du Pont de Nemours and Company (NYSE: DD) shot down all four of those proposed nominees, including Peltz, and elected two of its own choices to its board instead. Trian refused DuPont’s overtures of a lone board spot in negotiations between the two, and insisted on the appointment of all four of its nominees, which were originally nominated by Trian on January 9.
Among other things, Trian pointed out the extreme improvement in Axalta Coating Systems Ltd (NYSE:AXTA) since it broke away from E. I. du Pont de Nemours and Company (NYSE: DD), under which it was known as DuPont Performance Coatings. DuPont sold the division to The Carlyle Group LP (NASDAQ:CG) in February 2013, and its EBITDA improved by 67% almost immediately under new ownership. Axalta went public in November, 2014, and has been a hot stock ever since, up over 25% from its IPO price.
It will now be up to shareholders to decide whether or not to support Trian’s push for board seats. Shareholders of E. I. du Pont de Nemours and Company (NYSE: DD) who may be involved in deciding the direction of the company are John A. Levin’s Levin Capital Strategies with 1.04 million shares, Larry Robbins’ Glenview Capital with 787,168 shares, and David Harding’s Winton Capital Management with 621,457 shares.
Trian has a much less contentious position in Ingersoll-Rand PLC (NYSE:IR), which was their fourth largest holding as of September 30; at least today. Trian, a longtime shareholder, did pressure Ingersoll-Rand to spin off its security business back in 2012, which they eventually did (it would become Allegion PLC (NYSE:ALLE), which Trian holds 1.66 million shares in as of the end of 2014). Peltz also won himself a seat on the company’s board, though he eventually gave it up in 2014 due to other commitments. The Allegion PLC (NYSE:ALLE) spin off was completed by November 2013 and the new company has enjoyed strong success, up 30.83% since launch.
Ingersoll-Rand PLC (NYSE:IR) has also enjoyed strong run since Peltz became a major shareholder in the company in early 2012, rising nearly 75% to peak at $71.42 just before the spin-off of Allegion. After bottoming out at $53.57 in early October, Ingersoll-Rand has rebounded strongly to $67.63, and is up 6.75% year-to-date.
Ingersoll-Rand PLC (NYSE:IR), a $17.70 billion market cap company, operates in a number of sectors, including air purification, refrigeration storage and transportation, utility vehicles, and material handling, announced its fourth quarter results at the end of January. Adjusted earnings per share were $0.82, a hefty 34% increase from the fourth quarter of 2013, while revenue was up 5% year-over-year to $3.2 billion; up 7% if excluding the currency fluctuations resulting from the much stronger U.S dollar. Ingersoll-Rand also announced a 16% increase to their dividend on February 4, to $0.29 per quarter, up from $0.25.
Other current shareholders of Ingersoll-Rand PLC (NYSE:IR) among funds we track are Daniel S. Och’s Oz Management (also one of Allegion’s largest shareholders) with 7.33 million shares, Ken Griffin’s Citadel Investment Group with 4.76 million shares, and Steve Cohen’s Point72 Asset Management with 2.07 million shares.
Disclosure: None
