Billionaire Dan Loeb, who runs Third Point, one of the biggest hedge funds that agitates for change at publicly-traded companies, recently released a web site and a kind of attack video, criticizing Dow and its CEO, Andrew Liveris, for breaking promises to shareholders.
Third Point even created an advisory board of sorts that included AIG Chairman Robert “Steve” Miller and former Foster Wheeler CEO Raymond Milchovich. Those two executives have now been named to Dow’s board of directors. For its part, Dow will add US Bancorp CEO Richard Davis and former IBM CFO Mark Loughridge to the board as part of the deal with Loeb.
Dow Chemical and Loeb’s hedge fund Third Point have just announced an agreement.
Dow Chemical is now adding four independent directors to its board.
Two of those new directors—Raymond J. Milchovich and R. “Steve” Miller—had previously been retained by Third Point as advisers. They now have to act as independent directors, meaning they can’t have contact with Loeb.
It wasn’t a loss for Dow, though.
The other two directors were picked by Dow.
What’s more is the board’s size is actually increasing from 10 to 13 effective January 1, 2015.
Dow Chemical’s stock was last trading up more than 2%.
Loeb’s $17 billion Third Points last held 22,000,000 shares of Dow Chemical. Last week, the activist investor released a scathing political advertising-like video slamming the company’s management for “broken promises.” He also launched a website and touted Milchovich and Miller for having “significant expertise in corporate turnarounds and operational management, skillsets Dow desperately needs to move forward.”
The website, www.value-dow.com, has been taken down.
Dow isn’t Loeb’s only win this week. On Thursday, Sotheby’s—one of the Loeb’s other targets—said that its CEO Bill Ruprecht would step down following a “mutual agreement with the Board.” Loeb and two allies joined the auction house’s board back in the spring. Sotheby’s stock was last trading up about 8% in the pre-market.
Here’s the Dow Chemical release:
The Dow Chemical Company (DOW) today announced it will add four new independent directors to its Board:
Mr. Richard Davis, Chairman, President and CEO of U.S. Bancorp
Mr. Mark Loughridge, former Chief Financial Officer of IBM
Mr. Raymond J. Milchovich, Lead Director of Nucor and former Chairman and CEO of Foster Wheeler AG
Mr. Robert S. (Steve) Miller, non-executive Chairman of the Board of American International Group (AIG); Former Chief Executive Officer, Hawker Beechcraft, Inc.; Former Executive Chairman, Delphi
All four individuals will be included in Dow’s nominations for election at the 2015 Annual Meeting of Shareholders.
Loughridge, Milchovich and Miller will join the Board effective January 1, 2015, and Davis will join the Board in May 2015, following Dow’s 2015 Annual Meeting.