FrontFour Proposes Dissident Slate For OM’s Board

The activist investment firm FrontFour Capital has made good on its threat to nominate three directors to the board of the metal-based chemicals maker OM Group.

The three FrontFour directors who will be up for election at OM’s 2015 annual meeting include two with a chemical industry pedigree: Thomas R. Miklich, former chief financial officer at specialty materials firm Ferro, and Allen A. Spizzo, former chief financial officer at chemical maker Hercules. Also standing for election is David Lorber, FrontFour’s cofounder.

OM says it will evaluate FrontFour’s proposed directors and “in due course” decide to recommend or oppose them for election. OM adds that it is open to further “constructive” talks with FrontFour.

Earlier this month, FrontFour, which owns 5.7% of OM’s outstanding shares, outlined a series of actions it wants the chemical company to take to improve shareholder value. They include cutting costs by $50 million and buying back $250 million in stock. At the time, OM did not endorse FrontFour’s suggestion but rather responded that it is already on course to increase shareholder value.

FrontFour’s proposal comes in the wake of similar actions taken against the industry giants Dow Chemical and DuPont. Dow settled a dispute with activist investor Daniel S. Loeb by agreeing to add four new board members—two picked by Dow and two by Loeb. Investor Nelson Peltz is pushing to get four directors onto DuPont’s board.

FrontFour has succeeded in getting other chemical industry targets to make changes. Ferro agreed to place two FrontFour directors on its board after a tussle in 2013. FrontFour failed to get its dissident directors elected to the board of the specialty chemical maker Sensient Technologies, but Sensient did embark on a restructuring program under pressure from the group.