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Ashland, Cruiser Capital reach deal on board seats; Joyce named consultant

January 24, 2019
Chemical Value Chain

Ashland and hedge fund Crusier Capital (New York) have reached a deal halting Cruiser’s proxy fight against Ashland. Under the deal, Ashland will name former Union Carbide CEO William Joyce as a consultant to the company on “operations-related matters.” Cruiser will withdraw its’ four nominees to Ashland’s board, and support Ashland’s director slate at the 8 February annual meeting. Ashland has also agreed to seek input from Cruiser, along with other shareholders, in its’ search for two new independent directors, which will commence after the annual meeting.

Joyce, in his role as consultant, will work with Ashland CEO William Wulfsohn, and report his recommendations to the board. Joyce, who has been CEO of Nalco and Hercules in addition to Union Carbide, served in a similar role in a deal A. Schulman reached with Cruiser and fellow hedge fund Kingdon Capital Management (New York). Schulman was later sold to LyondellBasell.

Ashland has also agreed to name one, or both, of Craig Rogerson and Jerome Peribere to its governance and nominating committee. Rogerson is CEO of Hexion and former CEO of Chemtura, while Peribere is CEO of Sealed Air Corporation (Charlotte, North Carolina) and a former executive at Dow.

“We believe that Ashland has made significant positive corporate governance and board leadership changes,” says Keith Rosenbloom, managing director with Cruiser Capital. Cruiser is “encouraged” by recent discussions with Ashland, Rosenbloom adds.

Cruiser’s four nominees to Ashland’s board were Joyce; Allen Spizzo, a former CFO of Hercules; Pat Gottschalk; a former executive at Dow Chemical; and Carol Eicher, a former CEO of polyurethane foam maker Innocor and executive at Dow.

The deal between Cruiser and Ashland is a ‘standstill agreement,’ which expires on 15 October 2020. Cruiser has agreed not to engage in any proxy fights, nominate any directors, or engage in public criticism of Ashland management and strategy until that date.

Cruiser owns about 1.46 million Ashland shares valued at about $122.7 million, according to a November SEC filing.

By Vincent Valk

Source: Chemical Week

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