Investor suggests 'timely spin-off' of Brenntag's specialties unit

LONDON—An investor in Brenntag S.E. has sent a letter to the company's board making the case for a "timely spin-off" of Brenntag's Specialties business.

In the letter, supplied to European Rubber Journal, Engine Capital L.P., argued that Brenntag could double its current share price within 24 months by following a series of "value-enhancing" recommendations.

In particular, it said, the separation of Brenntag Specialties would "allow the business to achieve its full potential as a standalone entity" and unlock long-term value for Brenntag stakeholders.

Engine Capital added that the management team should clarify the strategic direction of Brenntag following the "surprising and unfortunate" Univar venture.

Engine Capital L.P., which owns approximately 1 percent of Brenntag S.E.'s outstanding shares, describes itself as "a value-oriented investment fund" with significant experience of investing in chemicals distributors.

These distributors, it stated, are currently or were previously considered direct peers to Brenntag, including Univar Solutions and Nexeo Solutions.