Thursday, February 12, 2009

There is no joy in Dowville for mighty Liveris has struck out

The other shoe finally fell for the Dow Chemical Co.

It cut its dividend for the first time in the company's history -- dropping it from 42 cents to 15 cents.

Cutting the dividend was hardly surprised, as Dow Chief Executive Andrew Liveris had cooled his defense on the subject in recent weeks. Top priority in times of economic uncertainty has to be the company's investment-grade rating, he said. [marketwatch]

The stock price is headed toward $9 today.

And Dow laid off 350 the other day in Freeport, says the Clute paper.
Meanwhile, a Dow shareholder has filed a lawsuit against Dow's board of directors, saying CEO Andrew Liveris should be fired for mismanaging a failed $15.4-billion takeover of Rohm & Haas Co., reports the Detroit Free Press.

The so-called derivative lawsuit, made public Tuesday in Wilmington, Del., also seeks damages from some board members on behalf of Midland-based Dow.
The Rohm & Haas takeover plan, and a foundering joint venture with Petrochemicals Industries Co. of Kuwait, put Dow "on the precipice of an unmitigated financial disaster," because officials failed "to bring rational business judgment to bear," stockholder Michael D. Blum said in the complaint...

...Dow "now perches on the horns of a dilemma," Blum contends. If it completes the Rohm & Haas merger, it will "careen into almost immediate insolvency," and if it doesn't, "it will be liable for astronomical damages," he said.

Besides removal of Liveris, the lawsuit calls for "corporate reforms at Dow" to allow more input by shareholders and "safeguards for the conduct of mergers and acquisitions."

"Dow believes that this litigation is defective" and will seek to have it dismissed, said Patti Temple Rocks, a spokeswoman for the company.

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