U.S. Markets closed

Cruiser Strikes Deal with Ashland to Avert Proxy Fight and Win Fresh Concessions

John Jannarone

Activist Shareholder Negotiates Consulting Role for Dr. William Joyce Including Presence at Board Meeting

By John Jannarone

Cruiser Capital Advisors struck a deal with Ashland Global Holdings, preempting a proxy contest and reaching fresh concessions from the chemical company after more than a year of public involvement.

In exchange for dropping its slate of nominees and backing the company’s, Cruiser Capital negotiated the appointment of Dr. William Joyce, retired former chairman and chief executive officer of Nalco, Hercules Inc. and Union Carbide Corporation, as a consultant to Ashland.

Dr. Joyce, who had been one of four nominees on Cruiser’s slate, will attend and present at a board meeting this month, according to regulatory filings late Tuesday. In his role, Dr. Joyce will work with Chairman and CEO William Wulfsohn and present his recommendations to Ashland’s board.

Ashland also agreed to add one or both of Craig Rogerson and Jerome Peribere to the important Governance and Nominating Committee. Mr. Peribere, the retired CEO of Sealed Air, was appointed to the board at Cruiser’s recommendation.

Since Cruiser, which owns 2.4% of Ashland, became publicly involved in November 2017, the company has added or committed to add four directors. In addition to Mr. Peribere, the company recently announced Mr. Rogerson would join the board after facing pressure from Cruiser to retire Barry Perry. Another director, Mike Ward, will retire after the February shareholder meeting and Ashland will add two new directors with direct input from Cruiser.

“We believe that Ashland has made significant positive corporate governance and board leadership changes. We are encouraged by our recent discussions and are pleased to provide constructive input to Ashland in its process to identify two new independent candidates,” Keith Rosenbloom, Managing Partner of Cruiser Capital Advisors, said in a press release. “Further, we are excited that Dr. Joyce will be working with Ashland to continue driving operational improvements at the company. Given the recent changes to Ashland’s board and governance, we support the combined chair and CEO role.”

During its public spat with Crusier, Ashland repeatedly cited share-price performance figures that give an inaccurate impression of the returns most shareholders enjoyed. An CorpGov entitled “The Myth of Ashland’s Superior Shareholder Returns – And What an Actual Investment Would Have Earned” explains how some unreasonable assumptions in a calculation the company cites lead to inflated results.

For instance, Ashland shareholders who bought the stock in October 2013 and made no trades would have seen a return of 45.4% over the next five years, according to calculations by CorpGov.com. That return is 28.2 percentage points below the 73.6% return Ashland has cited.

“We are pleased to have reached this agreement so we can return our full attention to executing on our ongoing transformation and achieving our financial and operational objectives,” Mr. Wulfson said in a press release. “Ashland has a history of regular, consistent board refreshment, and as previously announced, we look forward to working closely with Neuberger Berman, whose perspective has already proven extremely valuable, as we consider future director candidates, including those suggested by Cruiser Capital and other shareholders. Additionally, we look forward to deep engagement with Dr. Bill Joyce under the consulting agreement and to benefitting from his insights and perspectives to further enhance Ashland’s operations.”

 

Contact:

John Jannarone, Editor-in-Chief

www.CorpGov.com

Editor@CorpGov.com

Twitter: @CorpGovernor