Activist investor Starboard says it will nominate 5 candidates to LSB Industries board

MarketsAssociated Press

Activist investor Starboard Value said Tuesday it has nominated five candidates for spots on the board of directors of LSB Industries, seeking a shake-up at the company that makes chemicals as well as heating and air conditioning products.

Starboard Value said both of LSB's businesses are lagging compared to their competitors. It also said LSB needs better corporate oversight and is run too much like a family-owned company.

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Founder Jack Golsen stepped down as LSB's CEO on Jan. 1 and his son, Barry Golsen, was promoted from president to chief executive. Jack Golsen is now executive chairman. Another son, Steven, is the chief operating officer of the company's climate control business.

The company said in response that its directors are qualified and experienced, and five of them have joined the company in the last two years.

Last week, LSB said that after an eight-month review, its board and a strategic committee made up of independent directors concluded that LSB's current strategy is in its best interests and those of its shareholders.

Starboard's slate for LSB's board includes the firm's CEO and chief investment officer, Jeffrey Smith, and Peter Feld, a managing member and the firm's head of research.

Two Starboard-backed candidates were appointed to LSB's 10-member board in April after a previous dispute between the two sides. Starboard said the company hasn't made enough changes since then. Starboard said the company should consider strategic options including the separation of its two businesses.

LSB said Tuesday that it may consider those options after it finishes expanding a chemical facility in early 2016.

Starboard owns a 7.6-percent stake in Oklahoma City-based LSB Industries Inc.

LSB reported that its full-year 2014 net income fell by almost two-thirds, to $19.3 million, or 86 cents per share. Revenue for its chemicals business rose 20 percent to $454.9 million, while climate control revenue fell 7 percent to $265.4 million.

Shares of LSB Industries closed down 1.3 percent at $38.24 Tuesday. The stock is up 22 percent in 2015 and has gained about 8 percent over the last 12 months.