Dow, Third Point strike deal, nominates investor’s board members

Nigel Davis

21-Nov-2014

US Dow LONDON (ICIS)–US-based Dow Chemical on Friday said it had reached an agreement with Third Point to add four new independent board members to the company’s board, effectively avoiding a possible proxy battle with the investor group.

The new directors include two proposed by activist investor Daniel Loeb’s Third Point: Ray Milchovich and R Steve Miller.

Mark Loughridge and Richard Davis will also join the board in May following the 2015 annual shareholders meeting, Dow said.

Loeb had been pressing for a break up of Dow Chemical and earlier this month proposed that two of his nominees join the Dow board. A Third Point website on Dow Chemical challenged performance promises made by Dow and was highly critical of its CEO Andrew Liveris

“Third Point has agreed to a one year customary standstill and voting agreement,” Dow said on Friday.

Under the agreement Third Point will vote in favour of the company’s nominees at the 2015 Annual Meeting when 13 directors will stand for election to the board. Dow has also agreed to reduce the size of its board to 12 members before the 2016 annual meeting.

The Third Point website critical of Dow is no longer available.

Dow called press and investor strategy and reporting updates earlier this month to address growing opposition to Liveris and the executive board from hedge fund manager Loeb and his investment group.

At those meetings Dow unveiled new reporting segments and plans to increase divestments, including the sale of its subsidiary Angus Chemical, as well as a new tranche of share buybacks.

“Our board and management team are aggressively pursuing the best interests of all shareholders and managing the business for both the short- and long-term,” Dow said at the time.

It had robustly challenged the criticisms on the Third Point website on Dow.

“The statements contained therein display a fundamental lack of understanding of the company and an approach by an activist investor that has little interest in anything that benefits the many long-term shareholders in Dow,” it had said.

Shares of Dow joined several other majors in trading higher in mid-morning. Dow stock rose nearly 3%, slightly ahead of Eastman Chemical and LyondellBasell. Fellow US major DuPont was up 1.43%.

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