Huntsman, activist shareholder facing off over board nominees

Huntsman Corp. is battling with a major shareholder over the makeup of the firm's board of directors.

Starboard Value LP—a New York firm that owns almost 9 percent of Huntsman shares—has nominated four new directors to be voted on at Huntsman's annual meeting March 25.

That list includes Starboard CEO Jeffrey Smith and longtime plastics and chemicals executive James Gallogly, who previously served as CEO of LyondellBasell Industries and most recently was president of the University of Oklahoma before retiring in 2019.

Starboard's other two candidates for the Huntsman board are Sandra Beach Lin, a former executive with materials firm Celanese Corp. and a current board member of materials firms Avient Corp. and Trinseo P.L.C., and Susan Schnabel, whose executive experience includes Credit Suisse Asset Management and PetSmart Inc.

In a Jan. 12 letter to Huntsman CEO Peter Huntsman, Starboard CEO Smith wrote that his firm "invested in Huntsman because of the company's strong market positions, diverse product portfolios, innovative chemistries and difficult to replicate manufacturing footprint."

But Smith added that Huntsman's historical operating performance "has dramatically understated the intrinsic value of the company's assets" and that its "decade-long valuation discount to peers is a clear sign of investor skepticism."

In a Jan. 12 reply, officials with Huntsman in The Woodlands, Texas, said that they "are deeply disappointed that Starboard is forcing Huntsman and its shareholders through the cost and distraction of an unnecessary proxy contest."

"Starboard is more concerned with installing their handpicked candidates on Huntsman's board than allowing the Board and management team to create shareholder value, through our multiple initiatives that Starboard supports," they added.

Huntsman has named three new board members this month, replacing three that are retiring. Most recently, Huntsman on Jan. 11 appointed David Sewell to its board. Sewell is CEO of WestRock Co. and previously served as chief operating officer of Sherwin-Williams Co.

In a news release, Peter Huntsman said that Sewell "is a proven operator in the materials and chemicals industries with a strong track record of driving successful integration and cost reduction initiatives and profitable growth."

Earlier in the month, former Eastman Chemical Co. executive Curtis Espeland and Hyundai Motor Co. Chief Operating Officer José Muñoz had joined the Huntsman board.

Huntsman employs 9,000 worldwide and posted sales of just over $6 billion in 2020. The firm is a leading producer of polyurethanes and other specialty plastics and chemicals.

In the first nine months of 2021, Huntsman posted sales of $6.15 billion—up more than 40 percent vs. the same period in 2020—but its nine-month profit fell almost 30 percent to $497 million in the same comparison.

On Wall Street, Huntsman's per-share stock price was near $38 in late trading. That price has increased more than 43 percent in the last six months.