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Activist Engine Capital is pushing for Brenntag SE (OTCPK:BNTGF) to spin off its specialties business, an action that could double its share price to €140 a share.
Engine Capital, which has a 1% stake in Brenntag, wants the German chemicals company to public commit to separating its Brenntag Specialties from Brenntag Essentials and to establish a “meaningful’ share repurchase program, Engine Managing Partner Arnaud Ajdler and Engine Partner Brad Favreau wrote in a letter Tuesday to Brenntag’s board. The activist also wants the company to add a board member.
The Engine Capital letter comes after Brenntag earlier last month said it ended preliminary talks to acquire rival chemical distributor Univar (UNVR). In late November Engine Capital, which disclosed it had a ~1% stake in Univar, said the company should start a competitive sales process.
“… the value creation opportunity from splitting the businesses, pursuing best-in-class operations at Brenntag Specialties and establishing a share repurchase program are immense and should be prioritized by the Supervisory Board over transformational and risky M&A,” the Engine Capital executives wrote in the letter.
Univar (UNVR) is set to release Q4 results next Tuesday.
