BUSINESS

Dow Chemical agrees to add 4 new board members after pressure from activist-led hedge fund

11/21/2014 09:58 EST | Updated 01/21/2015 05:59 EST
NEW YORK, N.Y. - Dow Chemical Co. has agreed to add four new members to its board of directors after pressure from hedge fund activist Daniel Loeb's Third Point.

Shares of the specialty chemicals maker rose almost 3 per cent in morning trading Friday.

Three of the new additions will join the board in January. They are former IBM chief financial officer Mark Loughridge, former Foster Wheeler CEO Raymond Milchovich and former Hawker Beechcraft CEO Robert Miller. U.S. Bancorp CEO Richard Davis will join in May.

Midland, Michigan-based Dow has also agreed to include the group in its nominees for election at the 2015 annual meeting.

In January, Third Point disclosed that it bought a stake in Dow, calling it its biggest investment. Third Point currently has a 1.9 per cent stake in the company.

As recently as last week, Third Point published a website and video pushing Dow to shake up its board and increase shareholder value. In February, Dow rejected a push by Third Point to spin-off its petrochemicals division.

As part of the agreement announced Friday, Third Point has agreed it would not publicly criticize Dow or push for any changes in the board for a year.

Dow Chemical shares rose $1.49, or 2.9 per cent, to $52.97 in morning trading Friday. Its shares are up more than a third since a year ago.