Thursday, April 12, 2007

“Unauthorized” Talks

By ROB WESTERVELT (Editor, Chemical Week)
Those rumors of a planned leveraged buyout of Dow Chemical may not have been all that exaggerated after all. Dow today fired Pedro Reinhard, a senior advisor, former CFO, and current member of its board, and Romeo Kreinberg, executive v.p/performance plastics and chemicals, charging that both “were involved in unauthorized discussions with third parties about the potential acquisition of the company.” Dow declined to identify the source of the information, but added that it was a highly regarded source. “The action they were taking was without the knowledge of the company,” a spokesman says.
In an interview with Bloomberg News, Kreinberg said Dow accused him of conspiring with banks and foreign governments to acquire the company, a charge he denied. “This is unsubstantiated, unfounded and highly damaging to my reputation after 30 years with Dow Chemical,'' Kreinberg told Bloomberg. “I have never done anything to damage the company.'' Reinhard remains on Dow’s board and will stay until he either resigns or is voted off by Dow shareholders, says a Dow spokesperson.
It’s clear that private equity is interested in at least discussing an acquisition of Dow, but the company does not appear to be entertaining “discussions” right now. This is sure to become more interesting over the next few days. Stay tuned.

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