Standard Investments’ co-CEOs David Millstone and David Winter are ramping up the pressure on the British industrial giant Johnson Matthey.
The “two Davids,” as they’re sometimes called, issued another open letter on Tuesday that describe Johnson Matthey’s recent actions as “wholly insufficient” and failing to address its “many serious issues.”
Standard Investments is the largest investor in Johnson Matthey with an 11% stake, and the New York-based firm is concerned over what it describes as the “significant destruction of shareholder value.”
The open letter states that there is a “continued lack of urgency and incapacity of the current board to do what is necessary to turn Johnson Matthey around and help it to realize its potential.”
Johnson Matthey was not able to immediately respond to a request seeking comment.
In mid-December, Standard Investments had issued an earlier open letter calling for an overhaul of Johnson Matthey’s board of directors, the launch of a strategic review and the possible sale of its hydrogen technologies unit.
Based in London, Johnson Matthey is an industrials and chemicals company with a history that stretches back to 1817. It derives the bulk of its revenues from selling catalytic converters, which are used in cars to reduce harmful emissions.
Investors are anticipating that the converters will become obsolete as consumers increasingly switch from combustion engines to electric vehicles.
Johnson Matthey has been investing in its hydrogen unit as part of its strategy aimed at becoming a global energy transition company.
But the company’s London-listed shares have dropped 54% in the last five years, prompting Standard Investments’ call for changes.
“The board and management remain complacent and incapable of correcting a misguided strategy that has delivered sustained underperformance. This has created a massive credibility gap with investors and the broader market,” the investment firm said.
Johnson Matthey’s initial response in December stated that its board “welcomes constructive input from all shareholders,” and has had a dialogue with Standard Investments since it became a shareholder.
“JM is making progress in a challenging market environment through delivery of a comprehensive transformation strategy and will continue to adapt this strategy to the evolving market situation,” the company said.
Standard Investments is the investment arm of Standard Industries, an industrial powerhouse that ranks as one of America’s largest private companies with $11 billion in revenue.
The family business traces its history back to 1983, when corporate raider Sam Heyman (d. 2009), a onetime member of The Forbes 400 won a proxy battle for roofing-and-chemicals company GAF. Heyman was the father-in-law of Millstone and Winter.
The various businesses under the Standard Industries umbrella and related investments are owned by the Millstone-Winter-Heyman families; the family was worth $19.2 billion, according to Forbes estimates in February last year.