Mergers.
Here is a story about how Dow Chemical’s chief executive officer, Andrew Liveris, has been trying to buy DuPont "for much of his 11-year tenure at Dow." He offered a deal as far back as 2006, and when DuPont’s new CEO started this October, "he hadn’t even had a chance to find the bathrooms at DuPont when Mr. Liveris came calling." I like this story both because, how long does it take to find the bathrooms, and because it undermines one popular view of a potential Dow/DuPont deal, which is that it would be a soulless surrender to shareholder-value activists that will cut jobs and achieve efficiencies with no broader strategic purpose. John Cassidy is typical : In reality, this looks like a defensive merger designed to cut costs, enhance monopoly power in particular markets, and yield a quick buck to the likes of Nelson Peltz’s Trian Fund Management, which has built up a big stake in DuPont, and Daniel Loeb’s Third Point fund, which has been busy agitating at Dow Chemical. But, no, it turns out this deal may not be driven by a desire to increase efficiency and enhance shareholder value, which would be Bad, but rather by the old-fashioned motive of CEO empire-building, which would be Good. I confess that I find many critiques of the ideology of shareholder value puzzling — like, why should you do mergers? — but I pass it along.
Elsewhere, Bloomberg Gadfly’s David Fickling and Brooke Sutherland argue that the conglomerate discount is not all it’s cracked up to be. And "Pep Boys gave Bridgestone Corp. three days to top Carl Icahn’s $863 million takeover offer, saying its board had determined that the billionaire investor’s bid is superior to their earlier agreement."
Yahoo?!?
I said yesterday that Yahoo’s new plan to […]
