US Dow unaware of any unusual activity in stock

12 August 2013 22:59  [Source: ICIS news]

NEW YORK (ICIS)--US-based Dow Chemical is unaware of any unusual activity regarding its publicly traded stock, a spokesperson said on Monday.

On Friday, shares of Dow jumped $1.13, or 3.1%, to close at $38.04. Intra-day, shares hit a 52-week high of $38.50. Over 18.7m shares traded hands that day, over three times the average daily volume.

“We know of no unusual activity in our share ownership. Dow’s management and its board appreciate the investment and confidence of our shareholders, and we maintain active and transparent dialogue with our owners,” said Rebecca Bentley, spokesperson for Dow.

A Bloomberg article on Saturday noted speculation that an activist investor could target Dow after another large US chemical company – DuPont – had drawn interest.

In mid-July, there were media reports that activist investor Nelson Peltz bought a major stake in US-based DuPont through his investment vehicle Trian Fund Management.

DuPont subsequently announced it was exploring a potential spin-off or sale of its titanium dioxide (TiO2), fluoropolymers and process chemicals businesses.

On its second quarter conference call in July, Dow itself announced it is exploring plans to spin-off or divest its epoxy resins, European building and construction, and commodity chlorine derivatives businesses.

These businesses have annual sales of around $6bn (€4.5bn).

On 8 August, Wells Fargo analyst Frank Mitsch said he expects Dow to be more aggressive on stock buybacks following the company’s $2.2bn award in the arbitration case from Kuwait’s Petrochemical Industries Co (PIC) related to their busted planned joint venture K-Dow in 2008.

“We are committed to enhancing long-term shareholder value through our integrated portfolio, and have taken significant actions in line with this key priority – aggressively managing our portfolio, generating strong cash flows, paying down debt, and appropriately increasing shareholder remuneration through increasing dividend payments and the recently approved share repurchase programme – all in an effort to deliver higher shareholder returns,” said Bentley.

In the past two years, the stock prices of both Dow and DuPont have lagged many of their peers in the chemical sector, including PPG Industries, Westlake Chemical, Eastman Chemical and LyondellBasell.

On Monday 12 August, shares of Dow slipped $0.56, or 1.5%, to close at $37.48.

($1 = €0.75)


By: Joseph Chang
+1 713 525 2653



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