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Activist investor Peltz to join Ingersoll-Rand board

Nelson Peltz, one of the principles of the Trian Group, addresses the audience at the H.J. Heinz Co. annual shareholder's meeting in Pittsburgh, Pennsylvania August 16, 2006.


Ingersoll-Rand PLC named Nelson Peltz to its board on Monday, months after the activist investor pushed for changes at the manufacturer of air conditioners and security systems.

The move averts a potential proxy fight between Ingersoll and Mr. Peltz, whose fund Trian Fund Management LP holds a 7-per-cent stake in the company.

Ingersoll has said it is evaluating a number of strategic options, including those put forth by Mr. Peltz. It expects to complete its review by the end of this year.

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Trian has proposed restructuring Ingersoll's main business units or separating them into three standalone, publicly traded companies.

Trian has also said Ingersoll should raise operating margins closer to the level of peers and consider using debt to fund a more aggressive stock buyback or a special dividend, according to a U.S. regulatory filing. Trian also said it was seeking more independent directors on Ingersoll's board and that executive pay needed to better reflect performance.

Mr. Peltz will also join the Corporate Governance and Nominating Committee and the Finance Committee of Ingersoll Rand's board.

Mr. Peltz had declined to join Ingersoll's board in June, citing restrictions the company had imposed on him, such as precluding Trian from calling for an extraordinary general meeting of shareholders until the 2013 annual meeting.

It was not immediately clear whether that restriction had been lifted. An Ingersoll spokeswoman was not immediately available.

The Wall Street Journal had earlier reported the board appointment.

Ingersoll shares are up about 6 per cent since Trian unveiled its stake in early May. In Monday trading, they were down 0.7 per cent at $44.77 (U.S.).

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Ingersoll makes industrial air compressors, security systems and golf carts, but its biggest business is heating and cooling systems as a result of its 2008 purchase of Trane. Its competitors include United Technologies Corp's Carrier unit and Lennox International Inc.

Analysts have said Ingersoll's air conditioner and security businesses fit together so the likely focus for future divestitures would be the industrial business, which includes air compressors and specialty vehicles.

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