Huntsman is pressured by activist investor

Abstract

Starboard Value, an activist investment firm that has been a thorn in the side of many chemical company management teams over the years, is now targeting Huntsman, aiming to get four new directors on its board. Starboard owns 8.6% of Huntsman’s outstanding shares. In a letter to Huntsman CEO Peter Huntsman, Starboard managing member Jeffrey C. Smith says Huntsman has a history of overpromising and underdelivering, which has led to “investor skepticism.” Smith likes some of Huntsman’s financial and capital allocation targets. He also endorses the company’s recent decision to consider selling its textile dyes business, which had sales of nearly $600 million in 2020. “However, we hope the Board recognizes that it is not a lack of aspiration, but a lack of execution, that has historically frustrated shareholders,” Smith writes. For example, in 2014, Huntsman set a goal of reaching before-tax profit of $2.0 billion in 2–3 years. But