Dow Chemical: Exception to the Rule?

Last week, I expressed astonishment that two Dow Chemical executives would solicit buyout offers without the board’s knowledge or authorization. These were rogue employees who hoped their brazenness might result in such a good offer that the board would forgive their misdeeds… Misguided for certain, and unusual within a “don’t rock the boat” company like Dow… Right?

Well, maybe not. Since my email column – which included my facetious offer to help market a sale of Thomson Financial – a number of LBO folks have written in to say that the Dow situation is not unique. Or even all that rare.

Instead, I’ve been told than a number of well-known buyouts have their origins in discussions between LBO firms and target company executives – discussions that directors were not aware of for weeks or months. The only rarity in the Dow Chemical situation, they say, is that the executives were fired and then publicly raked over their coals for their alleged impropriety (which at least one of them denies).

I’m heading downstairs for the opening cocktail hour of Buyouts Symposium East here at the Grand Hyatt, but will be certain to revisit this issue once I can confirm some additional details (like names).