SEC probes Dow/DuPont on buyout rumours

25 May 2007 13:27  [Source: ICIS news]

LONDON (ICIS news)--The US Securities and Exchange Commission has begun an investigation into the trading of Dow Chemical and DuPont stocks following unusual movements in their share prices, according to a media report on Friday.

The New York Times said that the SEC inquiry focused on the activities of two Dow executives who are accused of making secret buyout talks and on a $40bn Dow bid approach for DuPont made in the latter part of 2006. Neither company was available for comment.

Dow sacked the two executives in April at a time when the leading US chemical producer was caught in a wave of merger and acquisition speculation leading to the erratic share trading.  

Executive board member Romeo Kreinberg and former chief financial officer, Pedro Reinhard, both denied that they had talked to third parties about a possible takeover. The three parties have traded breach of contract law suits.

Reinhard has sued Dow and chief executive (CEO) Andrew Liveris for $75m, alleging libel and breach of contract. Kreinberg has filed his own suit, for about $600m. Dow in turn filed a breach-of-fiduciary duty lawsuit against Reinhard and Kreinberg.

Dow’s share price moved up sharply in March and April. DuPont’s share price rose from August 2006. The DuPont share price increase between September and December was 15%, the New York Times said.

By: Nigel Davis
+44 20 8652 3214

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