Third Point takes significant shareholding in Dow Chemical
Tuesday 21 January 2014
Third Point, the hedge fund run by activist investor Daniel Loeb, has taken a significant shareholding in Dow Chemical and is urging the company to explore a spin off of its petrochemical business so it can concentrate on being a specialty chemicals firm.
Third Point revealed in a letter to investors dated January 21 that Dow is its biggest current investment. The hedge fund argued shareholders might be better served by the spin off and also urged Dow to consider a “meaningful” share buyback.
“Dow shares have woefully underperformed over the last decade, generating a return of 46% (including dividends) compared to a 199 per cent return for the S&P 500 Chemicals Index and a 101 per cent return for the S&P 500,” said the letter to Third Point investors.
“We believe that Dow would best serve shareholders' interests by engaging outside advisors to conduct a formal assessment of whether the current petrochemical operational strategy maximizes profits and if these businesses align with Dow's goal of transforming into a 'specialty' chemicals company.
“The review should explicitly explore whether separating Dow's petrochemical businesses via a spin-off would drive greater stakeholder value.”
Dow Chemical shares rose more than 6 per cent to $45.93. Dow is the second-biggest US chemicals company with a stock market value of roughly $55 billion. Analysts estimated that Third Point's stake in Dow is bigger than its $600 million-plus stake in Yahoo, and more than 1 per cent of Dow's stock.
In a statement, Dow Chemical responded: “We believe our investments have yielded sustainable value for our shareholders and will continue to in the near and long term.
“We constantly review our company at the management and board level to increase our shareholder value and competitiveness. We intend to continue an open dialogue to further enhance value for all of our shareholders.”
Loeb also revealed in the letter that Third Point has taken a stake in T-Mobile, seen as a potential merger partner with Sprint, and in Ally Financial, a former auto financing division of the General Motors group that is undergoing a restructuring.
- 1 Mystery of the Siberian holes at the end of the world 'solved': Scientists offer explanation
- 2 Pope Francis issues top 10 tips for happiness
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 Israel's propaganda machine is finally starting to misfire
- 5 Sean Hannity reacts to Russell Brand's Israel-Gaza criticism: 'You're a dumb actor known for your failed marriage to Katy Perry'
Lost portraits of the Somme: 100 images of Tommies posing before they went over the top. Now can you help to identify them?
Mystery of the Siberian holes at the end of the world 'solved': Scientists offer explanation
Pope Francis issues top 10 tips for happiness
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Ashley Cole tweets unsettling meme of him stalking ex-wife Cheryl Cole and new husband Jean-Bernard Fernandez-Versini
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
- < Previous
- Next >
iJobs Money & Business
£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...
£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...