Elliott in its letter in May said Goodyear’s company-owned retail network is undervalued and “nearly worth Goodyear’s market capitalization.” The activist investor also demanded five new directors and a operational review committee at the time.
Splitting up and selling its European division is also a possibility, a Wolfe Research report suggested, noting that rivals Pirelli & C SpA and Michelin trade at higher multiples.
The board committee is slated to make a public announcement on the operational reviews by Nov. 15, according to a regulatory filing.
“We have been encouraged by Goodyear’s openness to taking actions necessary to realize its full potential,” Elliott Senior Portfolio Manager Marc Steinberg and Portfolio Manager Austin Camporin said in Tuesday’s statement. “We are confident that our agreement enhances governance at Goodyear and ensures that the company will remain focused on long-term shareholder-value creation.”
Goodyear is naming three new independent directors supported by Elliott including Joseph Hinrichs, an automotive industry veteran who now serves as chief executive officer of railroad giant CSX Corp. The other appointees are Max Mitchell, CEO of aerospace and defense supplier Crane Co., and Tenneco Inc.’s former co-CEO, Roger Wood.
Elliott has agreed to customary standstill and voting agreements as part of the settlement, according to the statement.