Former Solutia CEO is Ferro board nominee as it fights Schulman bid

10 April 2013 18:39  [Source: ICIS news]

HOUSTON (ICIS)--The former head of Solutia, Jeffry Quinn, is among the three nominees to the board of Ferro, as the US-based specialty chemicals producer contends with a proxy fight and a hostile takeover bid by A Schulman.

Solutia has since been acquired by Eastman Chemical for $4.8bn (€3.6bn). Quinn led Solutia during the acquisition.

Quinn and the other nominees have said that A Schulman's bid was too low, according to a proxy statement. However, Ferro should not have dismissed the offer without at least talking with A Schulman and attempting to negotiate a higher price, they said.

A Schulman on 4 March bid $6.50/share to acquire Ferro. The offer valued Ferro at $855m, including an equity value of $563m.

Earlier, A Schulman's CEO, Joseph Gingo, said the nominees may persuade the board to give the offer further consideration if they are elected during Ferro's annual meeting, scheduled for 15 May.

If elected, Quinn and the other two nominees would form a minority block. They would attempt to persuade the rest of the board to adopt measures that they say would lower Ferro's costs and allow the company to focus on its core businesses.

The group did not specifically say it would consider A Schulman's offer.

Before running for Ferro's board, Quinn had expressed interest in becoming the CEO of the company, which is currently headed by an interim chief executive, Peter Thomas, according to a proxy statement.

The firm handling the CEO search responded by saying that Ferro was focusing on other candidates who were considered to be better aligned with what the board was looking for, the proxy statement said.

Quinn currently heads Quinpario Partners, a private investment and operating company that is focused on specialty chemicals and performance materials.

Running with Quinn are David Lorber and Nadim Qureshi.

Lorber is a co-founder of FrontFour Capital Group, an investment advisor. He did not immediately respond to a request for comment on Wednesday.

Qureshi is a partner in Quinpario.

The three are running against incumbent directors Richard Brown, Gregory Hyland and Ronald Vargo.

Brown is the chairman of Performance Fibers. He resigned as the CEO of that company on 4 February.

Hyland is the CEO of Mueller Water Products.

In its proxy statement, Ferro did not specify Vargo's current employment. However, he has been an executive at such firms as ICF International, Electronic Data Systems and TRW, now part of Northrop Grumman.

In a statement made late Tuesday, Ferro said Quinn and the other two nominees would add no value to the board, and they have not made any productive suggestions for the company.

Ferro already is making progress on a programme intended to improve the company, it said.

"We have simplified our organization structure, significantly streamlined our operations, divested two non-core businesses, and we have entered into a global shared services [agreement] with one of the world’s foremost providers of technology and outsourcing services," the company said.

These moves should save the company about $30m in 2013 and $70m in aggregate savings in 2014, Ferro said.

($1 = €0.76)

By: Al Greenwood
+1 713 525 2645

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