White vs. Gold: DuPont board fight May 13

UPDATED: After failing to cut a deal with billionaire activist Nelson Peltz in two years of negotiations, DuPont Co. boss Ellen Kullman has set May 13 as the date for the Wilmington bio/chemical/materials giant's annual meeting and vote-count for the 12-member board. The company invited investors who held shares at March 17 to assemble at 8:30 a.m. at its newly-relocated headquarters complex, at Chestnut Run Plaza, Building 730, Centre Road (Delaware 141), outside Wilmington, Del. DuPont statement here, links to four DuPont SEC filings today and one by Peltz's Trian here.

Kullman is one of ten incumbent directors, plus two newcomers including James Gallogly, who takes credit for reorganizing chemical maker LyondellBasell, and Ed Breen, the former Tyco boss, corporate spin-off artist, Stone Harbor hotel owner and Comcast director. Against them Peltz has said he will run himself with three allies who have long corporate experience. Shareholders, who have been showered with propaganda by both sides disputing whether DuPont under Kullman has done enough to sell or spin off low-growth businesses, cut costs and boost sales, may choose between DuPont's slate on a white postcard, or Peltz's Trian fund candidates on gold. More on Peltz, DuPont and the Mondelez-Kraft-Nabisco plant closing in Northeast Philly here.

DuPont shares, after rising on Kullman's watch and since disclosure of Peltz's activist campaign, hit a 22-year high of $80.50 on March 13, but have since fallen to $74.34. That day, DuPont again rejected Peltz's program, which it says will "destroy" value instead of creating it.  In a March 16 report, Bank of America analyst Kevin McCarthy called Peltz's investment and the prospect he will succeed at imposing excessive cost cuts and forcing a break-up of the company's remaining businesses the biggest risk facing DuPont. Credit analysts at S&P and Gimme Credit have warned that Peltz's program would likely balloon DuPont's debt, reversing Kullman's goal of reducing it while rates are low.

Even if Peltz convinces sort-of-activist-friendly Vanguard Group and other big DuPont investors to back his program of squeezing more cash out of DuPont (and further reducing its once-dominant but fast-effacing profile in Wilmington), he will gain at most one-third of board seats, enough to press for more structural and management changes.