Hedge fund Starboard Value LP has not secured enough support from shareholders of Huntsman Corp to replace four of the U.S. specialty chemicals maker's board directors with its own nominees, people familiar with the matter said on Friday.

Starboard had argued that Huntsman needs a shake-up to address what it called the company's weak financial performance and its board being captive to CEO Peter Huntsman, whose father founded the company in 1982.

Huntsman responded by pointing to its shares being near all-time highs and outperforming peers, as well as to the additions of eight new directors to its board since 2018.

Huntsman, which is valued at $8.6 billion and makes chemical products for use in construction materials to plastics, is expected to announce that its slate of board directors has prevailed in a shareholder vote when its convenes its annual shareholder meeting later on Friday, the sources said.

The sources requested anonymity to discuss the outcome of the shareholder vote ahead of an official announcement. Representatives for Huntsman and Starboard could not be reached for comment.

The defeat is Starboard's second loss of a shareholder vote in less than a year. It also failed in its board challenge against cloud services provider Box Inc in September.

Starboard's director candidates at Huntsman included former LyondellBasell Industries CEO James Gallogly, Starboard chief executive officer Jeffrey Smith, former industry executive Sandra Beach Lin and former banker Susan Schnabel.

Starboard is one of the industry's busiest activist investors and has long won more board seats than other activists, data show.

Last year, Huntsman promised to improve margins and return $1 billion to shareholders through share repurchases and pledged to run a sales process for its non-core Textile Effects unit and not to spend more than $500 million on a single acquisition.

Huntsman shareholders appear to have ended up following the recommendation of proxy advisory firm Glass Lewis, which backed all of management's candidates. Institutional Shareholder Services, another proxy advisory firm, had recommended that investors elect two of Starboard's nominees.