Trian's Peltz says prospects for DuPont settlement 'dim' -CNBC

(Adds DuPont's statement in paragraph 11, updates share movement in last paragraph)

By Sam Forgione

NEW YORK, May 11 (Reuters) - Nelson Peltz, activist investor and principal of hedge fund Trian Fund Management, on Monday told CNBC that the prospects for a last-minute settlement with DuPont in a proxy battle were "dim".

DuPont has refused to add Peltz to its board and has rejected his demand to split the company's volatile materials business from the more stable units such as agriculture, nutrition and health, and industrial biosciences.

Trian, DuPont's fifth-largest shareholder with a 2.7 percent stake, has for months criticized DuPont's underperformance and has called on the board to be more accountable. Shareholders will vote on whether Peltz should join DuPont's board on May 13.

"I think the prospects for a last-minute settlement are very dim," Peltz told cable television network CNBC. He said, however, that he was "looking forward to being collaborative in the boardroom" at DuPont.

The California State Teachers' Retirement System (CalSTRS) on Monday announced it had voted its 3.6 million DuPont shares in support of a slate of board candidates proposed by Trian Partners.

"From our standpoint, this proxy contest is a referendum on DuPont's lackluster performance and the inability of the current board to hold management accountable - not about separating the DuPont businesses," said CalSTRS director of corporate governance Anne Sheehan.

Peltz said he was not considering selling his stake in DuPont if his firm failed to win its proxy battle with DuPont.

"We don't even think about not winning," he said.

Peltz also said that DuPont's shares have spiked on key events indicating Trian's involvement in the company.

"The market has spoken. The market is telling us what they want. They want Trian there," Peltz said.

DuPont issued a statement late in the evening, saying Peltz's comments on the company's performance under the current management's tenure are "blatantly wrong in terms of both the time period and the stock appreciation".

Peltz said that the view that Trian is seeking to cut research and development and leverage up the company were "totally inaccurate" and that he wanted research and development to be controlled by the heads of the individual businesses at DuPont.

DuPont could earn a return from its research and development that way, he said, as opposed to the losses over the past five years. Peltz said earnings per share would be $6.50 if DuPont had kept its "promise" but that it was struggling to hit $4.