Big Venator investor pushes for board change amid plummeting stock price

Huntsman

10/01/2023 12:00

By Svea Herbst-Bayliss
       NEW YORK, Jan 10 (Reuters) - An investor with a large
stake in Venator Materials Plc  VNTR.N  has asked for board
seats, criticizing the chemical company's poor financial
performance and a 96% drop in its share price, according to a
letter to the board reviewed by Reuters.
    J&T MS 1 SICAV owns 14.3% of Venator and is ratcheting up
the pressure on one of the world's largest makers of titanium
dioxide, used in products including paints, sunscreen and
toothpaste, after months of trying to engage to privately.
    It proposed Martin Seycek, a member of J&T MS 1 SICAV's
supervisory board, as a director candidate and said it would
suggest an additional candidate to sit on the board, which
currently has eight members, the letter said.
    J&T wrote that it has tried to work constructively with the
Venator board since May 2022 but has encountered "apparent delay
tactics and gamesmanship." 
    "We strongly urge you to immediately add myself and another
independent director to be nominated by us to the Board," the
letter said. J&T also warned "we are prepared to exercise all of
our rights as shareholders to hold each individual director
accountable."
    Venator did not immediately respond to a request for
comment.
    J&T blames Venator's board for the 96% drop in the stock
price since its public listing in 2017, including a string of
closing prices below $1 a share which prompted the New York
Stock Exchange to warn in November that the company may be
delisted. Venator was spun off from chemical company Huntsman
Corp  HUN.N  and its share price tumbled 71% in the last 52
weeks.
    In its letter, J&T pointed to low gross margins, negative
cash flow and a lack of strategic direction as the roots of
Venator's troubles, forcing the company to ask turnaround
management specialist Alvarez & Marsal Europe LLP for advice on
operational and financial moves.
    "Given the deteriorating situation and the Board's poor
oversight, we believe that the incumbent directors have
forfeited the right to maintain the status quo and chart the
path forward for Venator," the letter said.
    J&T's letter says Venator's board, which includes Huntsman
CEO Peter Huntsman and chemical industry-oriented private equity
firm SK Capital Partners' co-founder, Barry Siadat, is dominated
by affiliates of Huntsman Corp and SK Capital and lacks
diversity and experience.
    While Venator rivals have directors with broad experience,
the Venator board's skills are focused mainly on the chemicals
industry have prevented it from creating "a go-forward strategy
to restore confidence among investors," the J&T letter said.
 (Reporting by Svea Herbst-Bayliss in New York
Editing by Matthew Lewis)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))