(Reuters) – Sachem Head Capital Administration LP has amassed a roughly $1 billion stake in Worldwide Flavors & Fragrances Inc (IFF) and nominated 4 administrators to the chemical firm’s board, individuals aware of the matter mentioned on Wednesday.
The activist hedge fund’s board problem comes as IFF earlier this month accomplished its $26.2 billion merger with DuPont’s vitamin unit, making a meals substances and shopper items supplies large.
Sachem Head, headed by hedge fund veteran Scott Ferguson, desires IFF to take motion to enhance its monetary efficiency and combine the brand new unit easily, the sources mentioned, requesting anonymity as a result of the matter is confidential.
IFF didn’t instantly reply to a request for remark.
IFF, which has a market capitalization of $33 billion, has seen its share value lag behind opponents. Within the final 52 weeks, the New York-based firm’s share value has dropped 8.61%, whereas rival Givaudan has gained 10.31%.
The DuPont deal comes after the corporate agreed to accumulate Frutarom in 2018 for $7.1 billion. In 2019, as IFF built-in the corporate, it alerted the U.S. authorities to potential bribes Frutarom made in Russia and Ukraine.
IFF is run by Andreas Fibig who has been chief government and chairman since September 2014. Its board at present has 13 members, seven stemming from the IFF board and 6 newcomers from DuPont’s unit, together with Ed Breen, DuPont’s government chairman and chief government, who will turn into the lead impartial director on the 2021 annual assembly.
Sachem Head owned shares in lower than 20 U.S. firms on the finish of the third quarter, in line with a regulatory submitting that confirmed animal well being care firm Elanco Animal Well being Inc and supplies firm Olin Corp as its largest investments. Ferguson is a board member at every firm.
Final yr, Sachem Head gained 45.6%, beating the important thing Normal & Poor’s 500 inventory index, which gained 16%. In 2019, the New York-based agency returned roughly 22%.
Reporting by Svea Herbst-Bayliss in Boston; Enhancing by Bernadette Baum