(Reuters) – New York-based hedge fund Sachem Head Capital Management on Wednesday urged Eagle Materials Inc to separate its cement and wallboard businesses and nominated two candidates to the company’s board.
Sachem, which disclosed a 9 percent stake in Eagle Materials in March, said the diversion of Eagle’s cash to fund its expansion into oil and gas proppants has resulted in “substantial underperformance” in the company’s stock price.
“In our view, this discount (in the company’s share price)can be eliminated by separating (cement and wallboard) businesses into more focused entities,” Scott Ferguson of Sachem Head Capital Management said in a letter to Eagle’s investors.
Eagle Materials’ stock was slightly down at $89.44 in morning trading. The company’s shares have fallen 11.8 percent in the past