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Emerson Electric is only half as bad as Shaw says

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Sometimes rookies try too hard. That could explain the withering letter Emerson Electric received from D.E. Shaw, a relative newcomer to shareholder activism. The hedge fund has some valid points but may also be overstating its case, writes Three_Guineas.

D.E. Shaw sent an activist letter and slide presentation to the board of Emerson Electric on Oct. 15. The hedge fund is urging Emerson to reduce costs, change its governance and break up its main segments. D.E. Shaw, which owns more than 1% of the company, says the breakup could increase shareholder value by over $20 billion and increase the share price by over 50%.

If the breakup occurs, Emerson would be the largest industrial conglomerate to do so following activist pressure.

 

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