DuPont rises on plan to split the company

Shares of DuPont Co. rose modestly this morning to above $65.50 -- a 13-year high -- after last night's announcement that the Wilmington-based chemical giant plans to spin off its profitable but volatile Performance Chemicals business, and its related fluorochemicals and titanium-dioxide (white-paint-base) factories, including a TiO2 plant at Edge Moor, Del., over the next year and a half. The new company will have sales of around $7 billion a year, vs. $28 billion for what's left of DuPont.

DuPont had been under pressure by activist investors including Nelson Peltz to separate commodity businesses like paint from higher-growth businesses like biotech, pesticide and photovoltaics; speculation about a sale or spin-off has boosted share prices over the past year. But in an interview on Bloomberg TV this morning, DuPont ceo Ellen Kullman said she hadn't spoken to Peltz about it, and said the Performance Chemicals split has been in the works for more than a year.

Citi projected DuPont shares will rise to $70 on the news now that it has "fewer balls to juggle," according to a report by analyst PJ Juvekar. He expects a spin-off like DuPont's 1999 divestment of Conoco, the oil company. Kullman said the company is still looking for the best way to separate. Juvekar says DuPont's remaining businesses in some cases have "nothing to do with" each other and other splits are possible.

But in separate reports compiled by Bloomberg, Jeffries analyst Laurence Alexander predicted share prices, which have already risen for months on speculation, won't rise beyond the current level in the forseeable future, and the Performance Chemicals separation will make a rumored pesticides spin-off less likely. : hold at $64. Ads focus on biotech, photovoltaics, advanced materials. Makes ag spinoff unlikely.

Kullman has noted the Ti02 business, where DuPont has a world-leading market share, is profitable, but demand is volatile. She has not yet named a management team for the new company.

DuPont has bought and sold large business units for much of its long history; a number of former DuPont divisions still have headquarters in the Wilmington area or neighboring metro Philadelphia, including Axalta, the former Dupont Coatings, which new owner Carlyle Group is moving to offices in Philadelphia and Chadds Ford.

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