BOSTON, March 25 (Reuters) – Hedge fund Starboard Worth LP on Friday misplaced a combat to switch 4 administrators at Huntsman Corp (HUN.N) however shares of the U.S. specialty chemical substances firm tumbled in early buying and selling as buyers discovered in regards to the consequence.
Starboard, which owns 8.8% of Huntsman, argued that the chemical substances producer wants a shake-up to enhance its monetary efficiency. The hedge fund additionally mentioned the corporate’s board was captive to CEO Peter Huntsman, whose father based the corporate in 1982.
Huntsman countered by saying it had the best individuals and plans in place to supply robust returns and pointed to its shares being close to all-time highs and outperforming friends, in addition to to the additions of eight new administrators to its board since 2018.
Huntsman, which is valued at $8.6 billion and makes chemical merchandise to be used in building supplies to plastics, mentioned that based mostly on preliminary outcomes all 10 of its director nominees had been reelected.
“The end result of as we speak’s shareholder vote is validation of our portfolio technique and recognition that the Huntsman of as we speak is vastly totally different than the Huntsman of 5 years in the past,” CEO Peter Huntsman mentioned in an announcement.
The corporate’s share worth fell almost 12% in early buying and selling.
Starboard CEO Jeffrey Smith mentioned in an announcement that preliminary outcomes seem to indicate that lower than 50% of the shares excellent backed the corporate’s contested nominees.
“We hope that the board acknowledges that this clearly reveals that shareholders not solely count on administration to satisfy its guarantees, but additionally count on the board to carry administration accountable for these guarantees.”
The defeat marks Starboard’s second lack of a shareholder vote in lower than a 12 months. In September, it failed in its board problem in opposition to cloud companies supplier Field Inc (BOX.N).
Starboard’s director candidates at Huntsman included former LyondellBasell Industries CEO James Gallogly, Starboard’s Smith, former business govt Sandra Seaside Lin and former banker Susan Schnabel.
Starboard is without doubt one of the busiest activist buyers and has lengthy gained extra board seats than different activists, knowledge present.
Final 12 months, Huntsman promised to enhance margins and return $1 billion to shareholders by way of share repurchases and pledged to run a gross sales course of for its non-core Textile Results unit and to not spend greater than $500 million on a single acquisition.
Starboard expressed concern that Huntsman had did not make disclosures really useful by the Process Pressure on Local weather-retlaed Monetary Disclosures although buyers requested them two years in the past.
Proxy advisory agency Glass Lewis backed all of administration’s candidates whereas Institutional Shareholder Companies, one other proxy advisory agency, mentioned change was warranted and really useful that buyers elect two of Starboard’s nominees.
Reporting by Svea Herbst-Bayliss in Boston; Enhancing by Chizu Nomiyama and David Gregorio
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