Dow Chemical to Raise Dividend and Increase Stock Buybacks
Dow Chemical may still be resisting a call by the activist hedge fund manager Daniel S. Loeb to break itself up. But the chemical maker is taking more steps to return money to its shareholders.
The company said on Wednesday that it was raising its stock dividend by 14 percent, to 42 cents a share in the fourth quarter. It added that it was also increasing its share buyback program by $5 billion, to $9.5 billion.
Both steps fall short of the big breakup that Mr. Loeb - known for taking on the likes of Sony, Yahoo and the auction house Sotheby's - has advocated for the chemical maker. His hedge fund, Third Point, owns a roughly 2 percent stake of the $58 billion company.
But Dow has said that it believes that a more measured sale of nonessential assets, including its petrochemical business and its Angus Chemical Company, coupled with a stock repurchase program are better sway to slim down its operations and improve shareholder returns.
'Today's announcement serves as a firm indication of our board's confidence in Dow's fortified balance sheet position and future earnings potential, and further illustrates our commitment to consistently and increasingly rewarding shareholders,' Andrew N. Liveris, Dow's chairman and chief executive, said in a statement.
Shares in Dow were up 1.3 percent in premarket trading on Wednesday, at $50.15.
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