Investing Activist Chooses Big Target in DuPont Battle
Published By : 28 Jan 2015 | Published By : QYRESEARCH
Amid the full fledged activism for hedge funds and failing companies, the campaign by Nelson Peltz to replace four of the directors over at DuPont could possibly be the thing that corporate America will put its foot down for.
Investors have been pooling money towards activists after realizing that activists can help increase their bottom line. There are currently more than 400 funds that contain more than US$100 billion in total. Meanwhile, investors continue to search for bigger targets.
The most prominent company being the chemicals giant DuPont, the 200 year old firm has gathered a market value of US$65 billion and houses more than 58,000 employees. Trian is the company’s fifth largest shareholder, and possesses enough strength to challenge the company. Following the example of Apple Inc. being made to distribute more of its wealth, Trian has called for a full and clean breakup of the DuPont finances. This underscores the fact that shareholder activism is largely aimed at a company’s financial engineering.
Trian is currently arguing for DuPont in order to improve its performance, while the company’s stock gained almost 20 per cent in 2014. Their stock overtook several others in the S&P 500 stock index. The company has also pegged its shareholder return at 78 per cent within the past three years, which also beat stock market indices. DuPont has actually beaten quite a few benchmarks over the past 3 years during the tenure of Ellen J. Kullman, its then-CEO.
Activism has so far changed the outlook of companies and created many debates over their actual intentions. Corporate shareholder activism has changed the landscape of corporate America. There have been hedge funds that challenged eBay, Apple, and Microsoft, to name a few.