NEW YORK (AP) -- Hedge fund Third Point LLC says it has acquired a stake in Dow Chemical and wants the company to spin off its petrochemicals division.
Dow Chemical Co. shares jumped $2.25, or 5.2 percent, to $45.32 in morning trading after rising as high as $46.70 earlier.
Third Point says Dow is now its biggest investment. It said Dow stock has performed poorly compared to other chemical stocks and the S&P 500 and said a spinoff of the petrochemicals business would deliver more value for shareholders.
Media reports said Third Point paid $1.3 billion for the stake.
Dow sold its polypropylene licensing and catalysts business in October and said it wanted to raise $3 billion to $4 billion by divesting other businesses. In December Dow said it wanted to spin off or sell about 40 manufacturing plants.