BNTGF - Activist Engine Capital pushing Brenntag to spin off its specialties business

Activist Engine Capital is pushing for Brenntag SE ( OTCPK:BNTGF ) to spin off its specialties business, an action that could double its share price to €140 a share.

Engine Capital, which has a 1% stake in Brenntag, wants the German chemicals company to public commit to separating its Brenntag Specialties from Brenntag Essentials and to establish a "meaningful' share repurchase program, Engine Managing Partner Arnaud Ajdler and Engine Partner Brad Favreau wrote in a letter Tuesday to Brenntag's board. The activist also wants the company to add a board member.

The Engine Capital letter comes after Brenntag earlier last month said it e nded preliminary talks to acquire rival chemical distributor Univar ( UNVR ). In late November Engine Capital, which disclosed it had a ~1% stake in Univar, said the company should start a competitive sales process.

"... the value creation opportunity from splitting the businesses, pursuing best-in-class operations at Brenntag Specialties and establishing a share repurchase program are immense and should be prioritized by the Supervisory Board over transformational and risky M&A," the Engine Capital executives wrote in the letter.

Univar ( UNVR ) is set to release Q4 results next Tuesday.

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