New York - Dow Chemical, one of the largest chemical firms in the world and the company behind Styrofoam, has fired two senior executives for holding secret talks with a potential bidder for the company.
The terminations were revealed yesterday, four days after a British newspaper reported thata private equity bidder had lined up a US$50 billion-plus ($68 billion-plus) takeover approach for the company.
While the board has warned private equity that the company is unequivocally not for sale, it discovered this week that its former chief financial officer, still a board member, and a divisional head had been holding unauthorised talks about a possible bid.
Pedro Reinhard, who was chief financial officer for 10 years until 2005, and Romeo Kreinberg, a company officer, were dismissed with board approval, chief executive Andrew Liveris said. The pair had "engaged in business activity that was highly inappropriate and a clear violation of Dow's code of conduct".
"We are greatly saddened by the disrespect shown by our former colleagues. But we will move on to shape our future with an even greater resolve," Liveris said.
News of the firings, far from alarming Wall Street, added to the frenzy of buyout speculation surrounding Dow and sent its shares up sharply.
The global chemical industry has been abuzz with merger and acquisition rumours, with private equity firms said to be stalking several large companies, including Britain's ICI.
Shares in ICI, meanwhile, have soared on suggestions that a rival - perhaps even Dow Chemical - might make a bid for it.
Kreinberg said there was no truth to the company's accusations and that he had sought the advice of legal counsel. "The behaviour of the company is very unusual, and the accusations have absolutely no substance and are highly damaging to my reputation after 30 years of employment," he told the Associated Press.
