Daniel Loeb's Third Point Reveals Large Stake In Dow Chemical

(RTTNews) - Shares of Dow Chemical Co. (DOW) surged more than 8% in morning trading on Tuesday after activist hedge fund Third Point LLC said it had bought a large stake in the chemical company.

Third Point, led by Daniel Loeb, did not reveal the size of the Dow Chemical stake but said it was its largest current investment.

Earlier Tuesday, CNBC reported Third Point's Dow Chemical stake at $1.3 billion.

In a quarterly letter to investors, Third Point called for a spinoff of Dow's petrochemicals business and a share buyback to improve profitability.

Dow Chemical said in October that it expected to raise between $3 billion and $4 billion from asset sales in the next 18 to 24 months.

In December, the company said it planned to separate a major part of its chlorine value chain in a bid to streamline its operations and move away from cyclical commodity products. The assets being separated contribute $5 billion in annual revenue, inclusive of sales on the merchant market and sales to support Dow's downstream, value-added products.

Dow Chemical shares are currently trading at $45.78, up $2.71 or 6.29%.