Founder of Third Point Calls for Removal of Dow Chemical’s CEO
Founder of hedge fund Third Point, Dan Loeb, recently called for removal of Dow Chemical Co. Chief Executive Officer Andrew Liveris. The news came few days after Third Point agreed on a merger with DuPont Co.
Loeb supports the deal, but he has raised a question in the letter sent to Dow’s board on Saturday about the timing of the deal, the Wall Street Journal reported.
Loeb raised a questioned on the timing of the deal which was just two days before the expiration of a standstill agreement between Dow and the hedge fund, said person who doesn’t want to be identified because the letter hasn’t been published. Loeb showed his concern saying that the merger might have rushed beat the expiry of the accord.
Third Point has a 2% stake in Dow. Loeb has urged Liveris to separate Dow’s plastics and petrochemicals operations from faster-growing businesses such as crop seeds. In November 2014, when Third Point initiated a proxy contest, Dow agreed to turn over two board seats to nominees of the hedge fund. Both the sides also agreed to standstill arrangement, which stopped either one from publicly disparaging the other.
Directors of Midland, Michigan-based Dow, including the two nominated last year by Third Point, said they are in full support of announcing the merger. Eight Dow board members even issued individual statements in support of management and the merger agreement.
In the letter, Loeb said naming Liveris chairman of DowDuPont will be an insult to Dow investors and that the 61-year-old CEO shouldn’t have a role following the merger.