FrontFour Capital Is After Innophos

The activist shareholder FrontFour Capital has phosphorus chemicals maker Innophos Holdings in its sights. FrontFour sent a letter to Innophos executives demanding that they raise dividends, repurchase more shares, and consider selling their company, in whole or in part. In particular, FrontFour would like to see the company divest its cyclical phosphate fertilizer business and focus on food and beverage applications. And given the high values that similar companies are garnering, FrontFour thinks Innophos’s managers should explore a sale of the firm as well. In the letter, FrontFour executives say they left an Aug. 14 meeting with Innophos with the impression that the firm may instead “pursue an expensive, value-destructive acquisition.” Innophos responds that it will pursue a strategy in its own best interest. FrontFour, which owns a 3.3% stake in Innophos, previously targeted the chemical makers Ferro and Sensient Technologies, both of which responded with restructuring actions.