Peltz's Trian Softens View on DuPont Separation

In September Trian recommended the separation of DuPont's agriculture, nutrition and health and industrial biosciences segments into one company. It suggested DuPont's performance materials, safety and protection, electronics and communication segments be housed in another company.

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NEW YORK (AP) — The hedge fund of activist investor Nelson Peltz is taking a step back from its calls for Dupont to separate its business, saying Wednesday it is keeping an open mind on what the best approach should be for the chemicals company.

Trian Fund Management LP has pushed for months for DuPont to separate its business into two companies in an effort to boost shareholder value and improve its financial performance.

In September Trian recommended the separation of DuPont's agriculture, nutrition and health and industrial biosciences segments into one company. It suggested DuPont's performance materials, safety and protection, electronics and communication segments be housed in another company.

Trian sent a letter to fellow DuPont shareholders on Wednesday, seeking support for its slate of four board nominees. The company said that its nominees would work with DuPont's board to determine whether revenue growth and better margins could be achieved under the existing business, or if a separation was needed. Trian said its nominees "are open-minded as to the best path forward."

The hedge fund said that it doesn't view the election "as a referendum on separating the businesses, but rather a referendum on DuPont's financial performance. If elected to the board, the Trian nominees will seek to work collaboratively with the other board members to determine whether value can be optimized in the current structure or through a separation."

Last week DuPont Co. nominated two new independent directors, Tyco International chairman Edward Breen and former LyondellBasell Industries CEO James Gallogly. But Peltz said that he would continue his proxy contest. DuPont then said it was willing to consider one of Trian's nominees if Peltz agreed to drop his slate and support the company's nominees. DuPont said it was disappointed Peltz wouldn't consider any alternative that did not involve putting him personally on the board.

Trian owns approximately 24.3 million DuPont shares, or about a 2.7 percent stake, according to FactSet.

DuPont said in a statement on Wednesday that it has considered Trian's proposals to separate its business but believes it would be costly and not be in shareholders' best interests. The Wilmington, Delaware-based company said it will review Trian's latest comments as it moves ahead with its plan to improve value.

DuPont's stock shed 54 cents to $74.97 in afternoon trading Wednesday. Its shares are up 1.5 percent so far this year.

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