The Dow Chemical Company (NYSE:DOW) has been dealing with activist pressure from Dan Loeb’s Third Point for months, although the issue has been fairly quiet of late. CNBC’s David Faber said (according to Bidness Etc) that he’s been speaking with some of the company’s major shareholders.

Is Dow Chemical Heading For A Proxy War?

Hints of a proxy fight at Dow Chemical

It seems they led him to believe that a proxy battle might be in the company’s future. Later Faber reportedly said that he didn’t mean that Third Point would initiate a proxy battle. Of course that doesn’t mean other shareholders might not do it.

Loeb bought a more than 5% stake in Dow Chemical earlier this year. Since then, he has been pushing the company to change its strategy and increase shareholder value. One of the ways he thought Dow should do this was by separating its agriculture chemicals from its specialty chemicals into two separate businesses. That way, he said the company could focus on its core petrochemicals business.

Dow Chemical tries to work with Loeb

In March, Dow Chemical announced plans to divest some of its businesses in an attempt to appease Loeb. The plan is to sell between $4.5 billion and $6 billion in assets by the end of next year. Previously, the company had said it would sell between $3 billion and $4 billion worth of assets.

Then in May, Loeb said in his investor letter that he believed Dow Chemical continued to under-earn what it could potentially do in its petrochemicals business. The activist investor said that while management did agree to divest some of the company’s assets, they had not yet “adequately” addressed the under-earning issue.

Specifically, he blasted Dow’s “downstream integrated strategy,” which he believed “created a significant drag on upstream profitability. Loeb compared Dow Chemical to its North American competitor, LyondellBasell. He said although Dow has higher ethylene capacity, it has lower EBITDA than LyondellBasell.  The activist investor estimates that Dow should be earning at least an extra $2.5 billion every year.