Starboard sees scope for at least $100 million in Solstice cost cuts

Key Facts

Investment firm Starboard Value said Solstice Advanced Materials could cut overhead expenses by at least $100 million, making spending discipline one of its demands for the company in which it confirmed it holds shares. The investor outlined its position in a presentation published on 20 October 2026 at the Active-Passive Investor Summit. Starboard believes Solstice's current valuation does not reflect its fair value, an assessment underpinning its investment case. "We are excited to be shareholders," it said, confirming its ownership of shares. It expressed interest in engaging with Solstice, pairing its view of the company's value with demands on expenses and a focus on core businesses.

Starboard stressed that investors need confidence in Solstice's commitment to its core businesses, putting the company's business focus alongside its spending levels at the heart of its investment case. It framed that demand by saying the company must be "committed to its core businesses." The call for spending discipline comes after Solstice reported corporate expenses of $54 million in its second-quarter earnings release. Solstice recorded net sales of $1,148 million for the same period. That represented an increase of 11% from a year earlier, according to the results, with the investor's demands on spending and core business focus following the reported sales growth.

Solstice's nuclear business stood out in its second-quarter results, with revenue rising 27% from a year earlier, according to the company. Growth in the business exceeded the reported increase in the company's overall net sales for the same period. Solstice attributed nuclear revenue growth to improved pricing, one of the two factors it cited to explain the business's performance. It added that higher volumes also contributed to the growth, alongside the positive pricing effect. The company said in its earnings release that the performance reflected "both improved pricing and higher volumes," linking the annual increase in nuclear business revenue to both factors during the quarter.

Starboard's comments follow the mutual termination of the merger agreement between Solstice and Element Solutions on 27 August 2026, according to Solstice's filing with the U.S. Securities and Exchange Commission. Solstice's chairman said the decision to terminate the agreement followed talks with shareholders. He also cited discussions between the parties to the deal before the termination decision, according to the company's announcement. Under the agreed termination, Solstice owed no fees to the other party. Element Solutions likewise owed no fees, with the statement specifying that "no fees are payable by either party" as a result of the deal's termination.

Alongside the announcement terminating the merger, Solstice authorized a share repurchase program of up to $500 million, announcing a capital allocation decision alongside its decision on the deal. The company said it intended to fund the share purchases using cash on hand, according to its filing with the U.S. Securities and Exchange Commission. The planned funding also includes cash generated from operations, according to the same filing. The board retains the authority to modify or suspend the repurchase authorization without prior notice. It can also resume or terminate the program without prior notice, under the terms of the authorization announced by the company.

When it announced the termination of the merger deal, Solstice maintained its third-quarter guidance, according to its statement, alongside the announcement of the share repurchase program. It also reaffirmed its guidance for the full year 2026, covering both the quarter and the full year in the same announcement. The company set its next financial reporting date for 4 November 2026, when it will release third-quarter results. It said the results would be issued before the market opens that day, according to its earnings date announcement. Solstice will hold a call to discuss the results the same day at 8:30 a.m. Eastern Time, after publishing its quarterly financial figures.