By Svea Herbst-Bayliss
BOSTON -Activist investment firm Ortelius Advisors wants to take control of petrochemical products company Trecora Resources’ board and has nominated six directors, according to a letter seen by Reuters.
Ortelius founder Peter DeSorcy criticized how the company has previously spent capital and said there are many ways to boost Trecora’s lagging share price, including “organic, corporate finance, inorganic and strategic alternatives solutions.”
Several activist shareholders are pushing U.S. corporations ranging from retailer Kohl’s to exercise equipment maker Peloton to consider a sale as dealmaking is expected to remain strong this year following a record-breaking 2021.
In the letter to fellow shareholders, DeSorcy called Trecora’s stock price “consistently abysmal” and said he did not believe the current seven board members can make the right decisions for the company.
“Incremental change – such as adding one or two new directors to the board – is woefully insufficient to reverse a culture that lacks accountability,” DeSorcy wrote in the letter.
A Trecora representative declined to comment.
Ortelius is Trecora’s biggest investor with an 11.3% stake in the Sugar Land, Texas-headquartered company. Activist investor, Bradley Radoff, a former executive at Third Point, is also a large investor in Trecora and last year made a 13D filing which often hints at a proxy battle or even an acquisition.
Ortelius nominated executives with chemical industry expertise, restructuring experience, and investment management expertise.
In the letter DeSorcy underscored Trecora’s strengths, including first-class facilities and excess capacity, but said some $183 million in investments, made between 2014 and 2018, had “no discernible impact on the company’s financials.”
In 2021, Trecora’s stock price gained 15% but lagged the broader Russell 3000 Index which climbed 25.6% last year. Over the last five years, Trecora’s stock price has fallen 33.52%.
(Reporting by Svea Herbst-Bayliss; editing by Diane Craft and Tomasz Janowski)