Starboard Value, Jeff Smith’s hedge fund, wants seed giant Corteva to oust CEO Jim Collins. The fund also wants eight out of Corteva’s 12 board seats.
Scott Olson/Getty ImagesIt’s less than a month into 2021 and a big activist battle is brewing.
Starboard Value, the hedge fund led by Jeff Smith, is looking to take control of seed giant Corteva’s (ticker: CTVA) board and is calling on the company to replace CEO Jim Collins.
While Corteva is a relatively young company, the result of a spin-off from DowDupont in 2019, Starboard contends that its operating performance could be “meaningfully improved.”
Starboard’s assessment comes after Corteva stock gained nearly 40% last year, and set an all-time high this month, thanks in large part to a surge in agricultural commodity prices.
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But Starboard noted in a letter to Corteva’s board that the company has had a “litany of missed promises and unforced errors” as the fund called out Corteva for not improving its profitability. Starboard is aiming for eight of Corteva’s 12 board seats at the coming annual meeting, which has not yet been scheduled.
Corteva countered that it is at an “inflection point” and its work over the past 18 months will soon be reflected in earnings. It also expressed confidence in CEO Collins.
The market so far appears unsure of the looming activist battle. Corteva stock fell roughly 5% since Starboard’s letter was released—though much of that could be a matter of investors taking profits.
Starboard is no stranger to activist battles. It launched six campaigns last year and won 24 board seats, making it one of the most vigorous hedge funds of 2020, according to data from Lazard. It disclosed a 1.6% stake in $30 billion Corteva late last year.
The two sides have had conversations, but so far have not avoided a battle.
Write to Carleton English at carleton.english@dowjones.com
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