Dye and Durham wins price target raise at Scotia

The drama continues at Dye and Durham (Dye and Durham Stock Quote, Chart, News, Analysts, Financials TSX:DND) but at least one analyst sees green shoots emerging from the power plays surrounding the company.

As reported by the Globe and Mail, Scotia analyst Kevin Krishnaratne November 27 maintained his “Sector Outperform” rating while raising his price target on the stock from $20.00 to $25.00.

“We view the opportunity for new leadership as positive,” the analyst wrote. “Furthermore, we continue to mainly focus on the underlying value of DND, which we believe to be a strong asset leveraged to the rebounding real estate market with an increasing focus on organic growth acceleration and strong Adj. EBITDA margins.”

The battle for the future of Dye and Durham is now centered around the company’s December 17 AGM, where shareholders will vote to side with the company or a slate of directors proposed by activist investor Engine Capital, which owns 7.1 per cent of the company.

In a press release November 27, Engine Capital described Proud as a “Failed CEO” and took issue with the $10-million in severance the company will pay him.

“Dye & Durham’s Board members have allowed Matt Proud to run circles around them for years. After months of investor pressure and three weeks before the Annual Meeting, these directors finally acknowledged shareholder concerns by dismissing Mr. Proud. But the Board, led by Chair Colleen Moorehead and Chair of the Compensation Committee Ted Prittie, grossly mishandled this transition,” the firm said. “We were shocked to learn that the Board approved a $10 million ‘ransom’ payment to Mr. Proud despite having no legal obligation to pay any severance to him.”

Announcing an information circular that was released November 26, VP of Investor Relations Huss Hirji said “…the board details why it believes that the election of Engine’s poorly qualified nominees and the pursuit of Engine’s agenda will be value destructive for shareholders.”