Nov 23 (Reuters) - Newpark Resources, a provider of
drilling fluids systems and composite matting systems used in
oilfields, is being pushed by an activist investor to separate
its industrials systems and fluids business, according to a
letter seen by Reuters.
Bradley Radoff, a private investor who previously worked as
a portfolio manager at Daniel Loeb's Third Point hedge fund, has
approached Newpark's board and is pushing for the split. He
argues that the two segments lack synergies, appeal to different
investor bases and boost excessive corporate costs.
"The Company's own disclosures and investor presentations
highlight that the Industrial Solutions segment is a high-margin
business on a growth trajectory, while the Fluid Systems segment
is an unprofitable business operating at the opposite end of the
energy transition spectrum," Radoff wrote to the board.
"Newpark's board and management team are highly focused on
creating shareholder value as we execute on our strategic
priorities, particularly the expansion and diversification of
our Industrial Solutions business," a spokesperson said.
The spokesperson added that the company already said that it
hired JPMorgan Chase to review its portfolio and evaluate
alternatives. The company also said it values shareholder input
and hopes "to have continued constructive dialog with (Bradley
Newpark undermines its ability to have "a credible
environmental, social and governance story" by keeping the two
segments together, Radoff wrote. A majority of Newpark's board
members are oil and gas industry veterans.
The company's stock price closed at $2.72 on Monday. Five
years ago, the stock was trading at $7.80.
Radoff, who sits on independent energy company VAALCO
Energy's board and has successfully pushed for changes
at Tetra Technologies, where the company agreed to add a diverse
director and appoint a new chairman, is urging Newpark to split
at a time a number of other companies are breaking apart.
(Reporting by Svea Herbst-Bayliss; Editing by Dan Grebler and