One of Ashland Inc.'s 10 largest shareholders wants the Covington-based specialty chemical maker to reverse its plan to spin off its Valvoline unit and instead find a buyer for the rest of the company.
The Wall Street Journal is reporting that Elmrox Investment Group LLC has prepared a presentation on the sale that it plans to release publicly this week. The presentation believes the specialty chemical unit's sale could bring a sale price of more than $9 billion. Elmrox is pointing to the planned merger of chemical giants Dow Chemical Co. and DuPont Co. and other recent deals as evidence that dealmaking in the chemical sector is hot.
Valvoline, which is based in Lexington, could be worth more than $7 billion on its own, the investment firm says in the presentation that it shared with the Journal.
New York CIty-based Elmrox, led by Daniel Lawrence, describes itself on its Linked In page as a "fundamentally-oriented, global investment firm. The firm deploys capital in highly idiosyncratic situations where it has a significant variant perception."
In an emailed statement, Ashland told the Journal that it stands by its current plan. “We are confident that our planned separation of Ashland into two great independent, public companies is our best path forward to enhance shareholder value,” the company said.
Shares in Ashland opened at $96.24, down 11.3 percent since the spin off was announced in September. The stock is down 26.8 percent from its all time high of $131.52 set in May.
Besides operating the Valvoline business, Ashland makes chemical additives and ingredients that do everything from whiten teeth in toothpaste and reduce split ends in shampoo to strengthen blades on wind turbines.
The proposed split is the latest in a flurry of nearly 50 acquisitions and divestitures that have transformed the company from an oil refiner to a supplier of value-added products for customers in industries such as construction and pharmaceuticals.
Last year, it sold its water-technologies business to private equity firm Clayton Dubilier & Rice LLC for $1.8 billion.
That sale came after activist investor Jana Partners LLC bought a stake in 2013. Jana has since sold down its interest to less than 1 percent.
Valvoline currently ranks as the second-largest quick-lube chain and the No. 3 passenger car motor oil brand in the United States.
The brand operates and franchises approximately 940 Valvoline Instant Oil Change service centers nationwide.
Founded in eastern Kentucky, Ashland moved its headquarters in 1998 from the city that gave it its name to the Cincinnati region. It currently ranks 371st on the Fortune 500 list. The proposed spin off would drop it off the list.
This article originally appeared on Cincinnati.com
